National Aluminium Company Limited (NATIONALUM) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q1 FY27 earnings call of National Aluminium Company Limited Narco conference call hosted by Systematics Group. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your test on phone. I now hand the conference over to Ms. Shweta Dixit from Systematics Group.

Thank you, and to you. Thank you, Shaila. Good morning, everyone. On behalf of Systematic, we welcome you to the Q1FA-27 Earnings Conference call of Nalco Limfif. I would like to thank the management for giving us the opportunity to vote for this call. And I now hand over to Mr. Baris Ramu, Company Secretary, Nalco, to response the company's financial and operational performance. Over to you, sir.

Namaste, good morning. Warm greetings from Nalko, Navratanas IPAC under Ministry of Mines. Let me at the outset introduce our functional directors sitting in this morning call. In the middle is our CMD, Sri Vijendra Pratap Singh. Sitting next to him is Director Finance, Sri Aveykumar Behurya, and sitting next to him is Dr. Tapasubhar Patanag, our Director HR.

Good morning to all.

Sitting next to me is our Director of Production, Sri Pankaj Kumar Sharma sir, and I am Bharat Thao, the Compensatory and Compliance Officer. Sir, on 31st July evening, Nalko board Considered and approved the financial results for the first quarter of our FY27. Nalko has already registered a robust performance in the Q1. The one presentation is already uploaded in the website of the stock exchange also on the website of the company. It is a robust performance, and I will request our CMD, sir, just to highlight some of the key financials of this Q1, and then we will start taking the calls. Questions from your side, please.

Good morning. At the outset, our performance for the Q1, already the presentation is loaded, but I would like to give you highlights of the Q1 performance. Q1, our overall total income, which grew, if you compare to previous year, from 3930 crores to 5400 crores, around 39% growth Q1 to Q1, same if you see CPL-Y. Earnings, if you see PBT grew by around 88%, EBITDA grew by around 78%. So, there has been a substantial growth, both in revenue collection, both in profitability of the company. If you see the highlights of the performance, physical performance also has been very good. Whatever targets we have set in the beginning of the year, almost all targets we have achieved. We have achieved best ever production in bauxite, in hydrate production, and in power generation. As far as quarter one progress is concerned, best quarter one in all these areas. Financially, if you see best quarter performance we have done as far as our revenue generation is concerned is the ever best quarter we have done. As far as profitability is concerned, best human profitability we have achieved. And the major contributors have been, of course, our internal if we see improvement in the volumes of production, whatever targets we have taken, almost we have reached to the peak of the volume in all the areas. If we see refinery, if we see... Our metal production, all the areas. And we have targeted at least 5 to 10 percent more than the capacity utilization, whatever we are going to do, more than the rated capacity we have targeted this year. As far as other areas are concerned, we are also targeting to reduce our cost, increase our efficiencies, which is in our hand that is increasing volumes and reducing the cost. We have also going for some valued products for our future, for future expansions, as far as expansion is concerned, 15th century is going to come this year, and also we are targeting to expand our smelter capacity, for which we are going for CPR mixing capacity, going at with the various milestones, which we will be discussing in the presentation. So, once again, thank you Systematic Group for organizing this.

Yes. Ma'am, over to you. We can now request all our student participants to come forward with their questions.

Thank you. Thank you very much. We will now begin the question and answer session.

Anyone who wishes to ask a question may press star. And one.

Participants are requested to use handsets while asking a question. We will wait for a moment. While the question in QSM. The first question is from the line of Mr. Amit Lahoti, from Ajita Villa Capital. Please go ahead.

How is the commissioning process moving there, and can we still produce 300,000 tons in the current fiscal?

Our 15th refinery, the current, we have June onwards, we have started the commissioning, a few of the re-commissioning activities we have started, a few of the packages, almost around 50, more than 50 packages are there, a few of the packages, mechanical completion already has been done, and the trial of those packages are under process. Few other packages are left out. Our target is by September end, we have to complete mechanical completion of all these packages. Do the integrated trial first, that is the water run needs to be done within the packages. And after that, we start the actual production process, which will take maybe 3 to 4 months to stabilize and reach to the level of 60-70%. This year, our target was that we will be producing around 2 lakh tons of alumina from this refinery. So, even if we start the actual production from November, December onwards, after that also we will be able to achieve those kinds of figures from the system refinery that is around black tons of alumina production.

Right. So why has there been a delay? Because earlier we were planning to start producing from June onwards. So as we are seeing around six months of a delay. Any reason around it?

So, we were planning to start the commissioning activity from June onwards, and after that complete it in next three to four months. Of course, the mechanical completion, which was supposed to be done by June, July, may be getting delayed by two, three months. So, this is a big project. Big project. It is very difficult to exactly pinpoint the date of commissioning and all that, and it's a chemical process plan. So, Now, maybe by September end, we are targeting the mechanical completion will be there and we will start. There is almost two-three months delay is there, not very huge delay is there.

Sure. Okay. My second question is on employee cost, which has gone down below 1,600 crores if we annualize Q1 number of 395 crores. So, is it part of the superannuation plan that you guided in Q3 FY26 that you were going to affect senior people of around 200 to 50 with the cost saving of 70 to 80 crores? So, is it the same which is coming now?

Good morning. Myself, Awe Vevriya, Director of Finance, is a right question. Why our employee cost is going down? If you see the CTC of our last year, our average CTC was around 36 lakhs. And in this quarter, it is around 33 lakhs. There is a reduction of 3 lakhs almost. That is because, rightly you have said, that is because of the high-paid employees and induction of the employees at the entry level. That is the one reason. Second reason is we have made some provisions last year towards retirement benefit, that is provision towards actual evaluation of leave, gratitude, and which was on the higher side. This quarter we needed to provide that. And another area is PRP. We have to be here, Mr. Provision last year, which is not required to be provided this year in that ratio, that has reduced our cost, and we expect that this will continue in the next three quarters also.

Okay, so for the full year, we can still see this number around 1,600 crore. That is right.

Right. In the latter part of the year, in the last quarter, quarter full, there may be some impact of pay revision because first January 2027, pay revision is due. So the last quarter, there may be some increase in 15% additional. Otherwise, two quarter, second and third, the cost will be in this line.

Understood. Thank you so much.

Thank you, sir. This question is from the line of Mr. Aditya Walikar from AXIS Securities. Please go ahead.

My question is with respect to our alumina sales volume. So, for FY27, you have guided 25 lakh tons of alumina production. But anything in terms of sales volume, because that number fluctuates a lot. If you can guide on the full year volumes for FI 27.

This financial year, last year, we sold around 14 lakh tons of alumina. This year, we are targeting 16 lakhs. Whatever 2 lakhs extra alumina we are trying to produce from this team, that will be added to our sales volume. So, 2 lakhs extra we will be selling this year.

Yeah, understood. And the second part is, means we have seen now that the aluminium prices have come down. So, going forward in Q2, do you foresee any raw material cost pressure which will persist? Because we have seen and in the earlier quarter you have guided that there is some cost inflation on CP coke cost percentage and other raw materials. So, will it impact our margins going forward as the aluminium prices have cooled down?

Aluminium prices, you see, in the first quarter, average we got around 35, 3600, 3700 of LME. Now it has come down to around 3200. Governmental prices, of course, has increased. You see, caustic soda prices, last year average was around 42,000. In Q1, our expenditure was around 45,000 per ton. In Q2, it will become around 49,000. And of course, plastic soda prices are going to go up by around. 3,000 to 4,000 as compared to Q1. CP coke prices also has gone up, 53,000 was, 44,000 was last year, it has gone to 66,000 to 70,000. These are the two major areas and also HFO. HFO price, it was 46,000 last year, it has gone up to 75,000. So, this has increased our overall cost of production by around 15,000 to 16,000 rupees per ton of metal. So, these three areas, caustic soda, CP coke, and HF coke. These are the three areas where caustic and also aluminum fluoride by some amount. So, of course, around 10 to 15% increase in the food drama prices are there, which is increasing our cost by around 15 to 16,000 metal prices.

So, anything which can offset that means we have seen just recently, alumina prices have increased to $350 per ton. And then, is there any scope to offset that with lower fuel power cost? or you think that the marges would It takes light heat.

We are getting around 370 dollars. So, that will offset somewhat raw material, what is increase in the raw material cost. Because raw material had given us an expenditure burden in Q1 of around 120 crores, 230 crores in extra due to increase in the raw material crop prices. So, alumina prices are the prices which we are expecting it will if we remain at the level of 370, then that will offset the input raw material cost.

All right, sir. All right, sir. That's it. That's it from us. Thank you. The next question is from the line of Pinnakin from HSBC. Please go ahead.

Thank you very much, sir, for this opportunity. Sir, I have a few questions. The first is you highlighted $370 per ton as your alumina realisation for getting currently. And what was the alumina realisation you got in Q1, sir?

Just can you repeat the question? Just last line.

The alumina realises in Q1, water 1. Q1.

Q1 our average realises was around 3 to 3, alumina.

And water 1 costed alumina. Will water 2 costed higher or fat?

A little louder, we are not able to. Voice is cracking. It's not clear. Not very clear.

One second. Aluminous cost of production, sir, will it be higher in quarter two versus quarter one?

In quarter one, our cost of production, if you see, you are talking about alumina or metal? Alumina, alumina. Alumina cost normally range between 21,000 to 22,000. Last quarter, it is around within that range only. And the second quarter, since we have observed all the input cost increase in the first quarter, and similar... The pattern of cost, price will remain in the next quarter, and we don't think our cost will be increased. Rather, our cost will be within that range only, around 21,000 to 22,000 for ton of alumina. And rather, we'll be getting advertisements in the price, because CMG, sir, has already explained that the next quarter, we are going to get an incremental price of around $50 from alumina.

Got it, sir. Got it. My second question is, sir, you highlighted metal cost of production increase of 15,000 to 16,000 rupees a ton. Was that cost of production increase already seen in quarter one or will that increase come in quarter two versus quarter one?

No, it is already, it was already expected because we are knowing that raw metal prices are going to go up, these three raw metals, that is, Pustle Soda, HFO, and CP Coke. So, that was almost expected, and the similar kind of cost will continue in Q2 also.

Okay, similar kind of costs will continue. Got it, sir. Sir, my third question is, you highlighted LME prices which have moved. Now, how are the domestic aluminum premiums because you had highlighted previously that they change with a lag. So, have they increased in recent times or you see the premiums increasing in the domestic sales?

Sir, premium has increased. Our earlier premium was around $60. Now, it has gone up to around, we did the tender last, around $110. Premium has increased by around $50.

Got it. And do you expect this to increase further, sir?

No, no. That premium increase was due to that war situation in the Middle East. Now, since the war situation is easing out, we are expecting that it may remain same or maybe it may go down also.

Got it. And so my last question is because of the war situation in the Middle East, were any of your export shipments impacted which will now normalize either in alumina or alumina?

Yeah, few of the shipments. Like, one shipment was earlier ordered. Of course, that was before the war. It was ordered at $390 also. That has got materialized. So, we are getting better relation in that. As far as other shipments are concerned, other shipments, whatever is getting ordered, they are going. No other pending shipments are there.

Got it. Got it. Thank you very much, sir.

Thank you.

Thank you.

The next question is from the line of Mr. Vikas Singh from ICIC Securities. Please go ahead, sir.

Good morning, sir, and thank you for the opportunity. 2Q usually being a monsoon season had traditionally been weaker, especially on the coal input side. So, just wanted to understand, had we have sufficient coal inventory, including the captive this time, and any one of cost escalation or any disruption we have experienced so far?

Our plant is concerned that in Angul, that is for our smelter, there we are having sufficient coal because that coal we are getting from our captive source, around 60-70% of coal we are getting from the captive source, so their issues are not there. Of course, in our refineries, the coal stock is on the lower side. The coal stock we have to maintain at the level of maybe 10 to 15 days. Now it is around 2 to 3 days. That is because of the restriction given by the government. The priority of the rakes there, we are heavily dependent on the rakes. from the railways and the priority is given to the power plant. So, there some issues are there. We are taking it very aggressively with the Indian railways and our ministry and some improvement is there. And since now the restrictions, summer is over, restrictions will come down. So, we are expecting that the stock will also improve in the coming days.

As long as the rig availability for the shipment is concerned, there is no problem so far.

No, for that shipment, our own rigs are there for the dispatching gilsand alumina. For that, no issues are there. We have got our own BTIP rigs. For that, no issues are there.

Perfect. Sir, a different question. I think we keep talking about we going in Baltiwana, after we will come back, how do we come back?

Sir, I'm just guessing your voice is breaking.

Is it better?

Yeah, it is better, sir.

Hello. Yeah. So, sir, second question pertains to, we keep hearing about our half a million ton aluminium plant capex. Could you give us some highlights at what stage of board approval these plants are when we will start on this and the capex? Any?

For this 0.5 million ton smiter plant, We have already got technology supplier finalized, that is EGA. We are going to sign technology license with them this maybe this month by 10th or 15th. So DPR making is under process. The consultant is making the DPR. Our target is next 3 to 4 months we will be ready with the DPR and get the board approval maybe October, November for the DPR. For setting of this 0.5 million ton smelter and also 1000 megawatt power plant. After that, maybe we will take eight to nine months to order the packages. By next year, August, September, we should order all the packages and start the groundwork. Maybe next year, October, November. And from there, it will take three to three and a half years to set up this plant. So the timelines which we have given to the ministry and our internal timeline is by December 2030, we have to complete this plant along with the power plant. As far as the power plant is concerned, power plant, we have done one JV agreement with Nevalil Ignite. For setting up this power plant, so as to reduce our capex and to have the raw material security, that is the coal. NLC is having the coal mines here itself in Salchel district. So the coal supply will be from there. So that will be good for this power plant. So this power plant DPR is also under process. So at the same time, both will get ordered and get commissioned by 2030 and or 31 first term. CAPEX is concerned. The overall CAPEX expenditure will be somewhere around 25,000 crores. And this will start from financial year 27-28 and the peak will be 28-29 and 29-30 and 30-31. This will be the 2-3 years where this capex flow distribution will be there. This year for that project, no major capex will be there. Of course, technology licenses, we have to give something maybe 300-400 crores, but the major capex will be coming next financial year onwards.

No, sir. So just one clarification, the shipment of the exports which we do to Russia, is it on a dollar denominated or is it in the Russian currency? And whatever the dollar denominated sales we do in the export market, we book the dollar into rupee at the time of shipment, right?

No, whatever shipment our exports are going, that is on a dollar basis, at the time of ordering, and our tender is floated, we do the spot tender, and that is the dollar rate as of that day.

Okay, but then the booking happens, or the sales got booked at the time of shipment, right?

Actually, we do the spot tender, and the date of opening the spot tender, at that date, whatever the dollar prices are there, that is finalized.

Not yet, sir. Not yet. Understood. Thank you, sir, and all the best for you, sir.

Thank you.

Thank you. The next question is from Samana Gogia from Yes, Securities Limited. Please go ahead.

Yeah, hi, good morning. Thank you so much for the opportunity. So my first question comes on the captive coal mine. So we were targeting a 4.8 million ton production for FY27. So can you just elaborate on where we are in the EC process for, you know, our mine expansion?

So, already the mining plan approval we have done for mining plan approval is to be done from the board. This board we have done the mining plan approval and now we are applying for the EC. Next maybe 2-3 months we will be getting the EC. So, already we have started the production and 4.8 million ton we are sure. We are going at the rate of 4.8 million ton or monthly break up whatever we have done. Next 2-3 months we will be getting EC from MOFCC. So, there are no major issues in that.

Oh, okay, that's good to hear. And could you just give me what was our total coal production in Q1 from our captive mines?

Q1 was... 7.04 net. 7.04 net. Because initially what happened, initially 4-5 days, in the beginning of Q1, 5 days, the production from the mines were not there. There were some technical issues. Now we have rammed up the production. And the subsequent quarters will be managing those whatever shortfalls were there.

Okay, okay. Can you just repeat the number one more, sir?

11.04 lakh 10.

11.03. Okay. Sure. And sir, my second question is, you know, now the Prutangi Mines, we have already appointed an MBO. When do we see the production to take place, or is it already started?

Prutangi Mines, actually, one, we have already... Order the MDO and for going to the mines and starting the production, one road is to be made, eight kilometer road. For making the road, tree cutting is to be done. We have along with district authorities, some resistance is coming there, some activists and some resistance are coming there. District authorities, two, three times we have tried along with the state government, police force and all that. We are trying to mobilize the locals there along with the MDO. And I think in this month, this month itself, that is in the month of August, along with the authorities, we will be again going there for making the road. Once the road making will take around maybe 15-20 days, that method we are targeting maybe September, October onwards. October onwards, we will start the production.

Oh, okay. Sure, sure. That is quite helpful, sir. So, one last question I had. As of the, you know, March 2026, our total employee count was roughly 4,880. What would the employee count be as of right now or, you know, as of Q1 end?

For it, for it. As of now, it is for it, for it.

Okay. So, there could be another 150 to 170 employee reduction more by the A&M, right?

Yes, sir. Every year, we will be around 200. 170 to 200 every year, reduction will be there in coming 3-4 years.

Sure, sure, sir. That is quite helpful. All the very best.

Thank you.

Thank you, sir. The next question is from the line of Amit Murarka from Maxis Capital. Please go ahead.

Hi, thanks for the opportunity. You mentioned the mechanical completion of the Lumina plant in September and roughly additional 200 kt production, right? But next year, then, can we assume the full run rate of this capacity?

Yes, yes. Next year onwards, we have to do. We will be going to 1 million ton production from there and 2.3 million. Already, we are 2.2, 2.3, we are going from the existing. Maybe we'll be going to 3.1, 3.2 next year onwards.

Sure. Also on this local market premium for aluminium, how does it really work? Do you enter into some contracts once the premium is fixed or does it go with the spot market itself?

Actually, we do export tender, from export tender to premium, that is loaded on the domestic pricing, LME. Domestic pricing is based on the LME.

No, no, I am talking about the premium. So, when you sell in the local market, the premium that you book or charge customers in the local market is also based on some benchmark, let's say MJP benchmark, something like that, or you can not…

It is not the MJP. We do what we process we follow is we do one export tender. In export tender, whatever premium we do, that premium is fixed for next three to four months unless and until we do the next export tender. So, suppose we did an export tender last month, we got a premium of $110. So that premium will be loaded on the domestic pricing for next three to four months until we do the next export tender and we discover the premium.

Okay, okay.

You are talking about the metal price or aluminum?

Aluminium. The sales that you make locally.

That is our policy, what CMD sir has explained, that is our policy. We have a structured policy for fixing the aluminium price, and there are other factors are also there. One factor is premium, whatever premium is discovered for tendering, export tendering, that is added to our aluminium price domestic supply. Okay.

Sure, sure, got it. So, and revise based on every tender that you do.

Every tender, yes.

The frequency of tender depends 3-4 months, so we prove normally. Right. Also, what is the KPEX outlook now for FI 2728, if you could provide the numbers?

Our target is 1500 crores. Maybe we'll be crossing that. We'll be somewhere ending up with around 2627 you're talking, na?

Sir, this year as well as next year.

This year it will be, our target is around 1,500 because most of the payments for the stream is done. So, major capital expenditure is not there, but still we will be doing somewhere around 1,500 to 1,700 or 1,800 crores. Next year onwards it will increase because our expansion of the smelter will be there. So, next year how much we have planned?

Next year we have planned 2,500.

2,500 maybe in 27-28. After that, it will go to maybe 4,000-5,000 crores. After next, maybe 6,000-7,000 crores. We have done the phasing and the major expenditure will come from the smelter expansion and power plant expansion.

Sure, got it. And also captive coal, I think earlier you had mentioned about 4.6 million tons production this year. So, you seem to be on track on that.

Yes, captive coal, last year we did 4 million tons. This year we are targeting 4.8 million tons because 20% increase is allowed. For that, all permissions and all that under process and on a monthly basis, we are producing at the rate of 4.8 million tons and we will be achieving that at the end of the year.

Sure. Sure. That's it for me. Thank you.

Thank you. The next question is from Sumangal Nimatya from Kotec Securities. Please go ahead.

Yeah. Good morning. Thanks. So just continuing on the previous question. So one on the CapEx, can you share 1Q how much we spent? And then for the expansion, I just want to know the power CapEx will happen in the JV? So, will we be contributing only to the amount of equity, which could be maybe around 20-30% so just if you can explain how the power expansion capex will happen.

Yes. Power capex fund, what CMB Sarajali explained. Smelter, we are going to do EPC more, and for power plant, we have JV with NLC, and we'll be doing both, okay. So, contribution to a total expenditure towards our CAPEX for up to 2000. 30-31 will be around 24,000 crores. 17-18,000 crores on smelter and 6,000 crores towards contribution for this power plant. 1080 megawatt power plant through JEPI mode. The total cost will be around 12,000 crores and 6,000 crores from our side and 6,000 crores from NLC because 50-50 JEPI is there. In power plant, we have a depth-equity ratio. 3070. So if you follow that, our equity contribution will be lower. It is around 3500. Our share will be 1760. And balance will be financed through bank. Through our NALCO and NLC will be the guarantor because this is the new JV will be the guarantor and the money will be taken from the bank. So if you see otherwise, if you see our fund base, if you see your balance, it doesn't date, we have a fund base of around 3500. So, every year we are earning 3500 after paying our dividend and all our capex is regular. So, if you see that area, we need not to take any money from the outside because we have sufficient balance. Since we have... Entry to agreement of JV agreements for power plant. So the power plant will be financed by that company, JV company. Equity participation will be 30%, 70% will be taken from the bank. So balance money which we have will be utilizing for our expansion project of smelter and other project we are also considering that will be entirely through equity because we have sufficient balance. So, the power plant will be 70-30. 30 equity based, depth equity is 30-70. So, that is the present proposition and we are going to... Go by this philosopher.

Understood. Sir, for the power plant, 12,000 crore for 1,000 megawatt. I mean, generally the thumb rule is 7-8 crore per megawatt. So, why is the cost so higher?

It is not, sorry, 1 megawatt, I think, 10 crore 1 megawatt.

So, it will be 10,000 to 11,000 crore.

It is not higher. Because we are going to set up a 1,080 megawatt power plant.

Okay. Understood. And sir, what you said is the cash balance as on 1Q, cash is 10,500?

Yes. As on 30th June, 2026, as on that, it is 10,500 plus.

Understood. And in 1Q, how much did you spend for CapEx?

This year, or you are talking about the subsequent CapEx? Only in the first quarter. I think 350.

Understood. Understood. Sir, I wanted to understand that on the previous question on sales of metal, you shared it is, I mean, the premium is decided as per the export tender. So, the domestic price, just to clarify, it is the LME plus the customs duty plus whatever we get as a premium in the export. Are these three components there?

Sir, there are some handling charges and some stockyard charges, something are also added on that. On that basis. And transportation charges.

From port to our A point and port to the customer point, because you have a calculation module. The three factors are there, you have rightly mentioned, that is the export import duty plus premium plus handling charges and plus... Fed equalization, what Fed customer will have paid to their location, what they will be paying from our location to their location.

Understood. Sir, can you share what were these three components for OneQ? LME we know, but the breakup of the realization we…

In our domain, you can get it from our website. I think pricing policy is there. That policy, we need to see whether it is a classified one or not. We can share or not.

Okay. Okay. That's fine. And sir, just one last thing on the aluminium metal, you said 15 to 16,000 rupees increase in cost. So, this is 15,000. Yeah, 15 to 16. So, this is with respect to fourth quarter or with respect to last year?

Last year average. Last year average was 156. One six, one fifty seven around, one lakh fifty seven thousand. This year average first Q1 is around one lakh seventy thousand.

And so for the, as per the today's trend 2Q should be what sir?

Q2 will slightly, slightly increase because CP coke prices and plastic soda in Q2 will be slightly higher, not much higher, maybe it will go to 172 or 170, 172. It depends on how much efficiency we are achieving.

Understood. And just one last question, sir. I mean, when we are adding around less than a million tons of captive coal this year, what is the cost saving, what is the difference between the cost of captive coal versus what we are replacing, linkage or e-option coal?

Our cost of captive coal, which we are sourcing from our own mines, it is around landed cost Thank you. If you compare this cost with our coal, there are two types of coal we are taking from the coal India. One is the agreement, FSA, linkage, fuel supply agreement. Another is through oxygen. So, FSA coal is around almost the same, 17, 16, 17, and if you see that oxygen coal, it is varying from 3,500 to 3,600. There is a difference in the oxygen coal. And if you see the FSA coal, FSA coal we are not regularly getting because of the rack supply. So, the oxygen coal is too high than our captive coal. So, there is a great advantage between oxygen coal and our captive coal. Okay. That is 1,500, almost.

Okay. And, sir, last year, what is the breakup of a coal? How much was linkage and how much was e-auction?

Last year, if you see linkage, the linkage is not up.

Around 55, 45.

Linkage and e-auction.

Linkage and e-auction.

We are talking about, because of total 7.2 million, 4 million is our own. We are taking 3.2 from Coal India. Out of 3.2, Linkage and e-auction, how much?

Linkage was around 34 million. 30 lakhs from our CPP and 10 lakhs from the DeFi. Linkage. And the oxygen pool, it was around 1 million, 1 million, 10 million.

Just we'll take up the data and let you know.

Sure, sir. That was my last question. I'll wait for the answer, and I'll join back the queue. Thank you. Thank you, sir. Thank you.

The next question is from Mr. Diganth Arya from Green Age Wealth. Please go ahead.

Thank you for the opportunity. Sir, just two questions I had. One was on the aluminum metal price outlook. Because the Middle East war destroyed one or two big production factories. When they come back on stream, what happens? What is your expectation of aluminum metal prices? That's number one. And number two is that, you know, in recycled aluminum, also India is seeing a lot of investment. You know, like, does Nalko have any plans and, you know, can that impact our sales going forward two, three years later? These are the two questions.

Metal prices, as of sound, it is $3,200. LME is $32. So, what forecasts are telling CRU and PLATS and all that, that remaining part of the year, that will remain somewhere around 21-32. We are also expecting that somewhere in between 3000 to 3200 will be the LME in the remaining part of the year. Because whatever smelters are supposed to come in the Middle East, that will be coming maybe by end at the Q4 of this financial year. Because these smelters will take some time more, 6-7 months, 8 months more. So, supply restrictions, there the projections are there. There will be a deficit of around 0.88 million ton of metal in the international market. If you see the production and consumption pattern, there is a deficit of around 0.88 million ton. So, LME will be there somewhere around 3200. Got it, sir. And as far as recycling is concerned, we are talking about recycling. As far as Nalko is concerned, recycling basically is done for the secondary producers who are making small, small quantity, and since we are a major producer, so we do not go into a recycling because that also disturbs the quality of the metal we produce. In the aluminium sector, the quality of the metal is very important. The purity of the aluminium. Whenever the recycling is done, the quality assurance is not there. So, our plans for recycling is not there.

Okay. Okay, sir. Okay. Thank you so much.

Thank you.

Thank you. The next question is from Mr. Akhilesh Kumar from MK. Please go ahead.

Hi. Hi, sir. Thanks for taking my question. So, my first question is that for this quarter, did we have any LME-linked contracts for Illumina? And if yes, then how do we stand for the quarters ahead of us?

Just we could not get you, if you can repeat your question.

Yes, sir. So, my question is on, did we have any LME-linked contracts for Illumina for 1Q for 27? And if yes, then how do we stand for the quarter term of us?

Term contract in Q1. I think in the beginning, one or two shipments are there. But now, as of now, last two, three months, we are not having any, that we call as a term contract, which is linked to the LME. That is not there. Because we had few tenders in which the percentage was very low. It was coming around 10% of the LME. That's why we cancelled that tender. Because spot prices, we are getting better.

So, is it fair to say that for FY27 also for the remaining of the year, we won't be having any term contracts?

Actually, we go for the tender. We will be doing some tender. If we get better prices, then only we will go. Because as of now, if we are getting $370, and the percentage-wise, if we get only 10%, 11%, so around 3200 LME, that will come to maybe around $320. So, we don't order that. So, it totally depends on, we'll be doing tender, if we get the better prices, around 12%, 13%, 14%, then only we'll book the order.

And can you, sir, also explain how we are getting this $50 of premium versus our 1Q average, which you said was around $320 for Illumina. And now, for this quarter, you are expecting it to be $370. So, why this difference?

Whatever premium I was talking, that was for metal, aluminum. Alumina, whatever we are selling, that is a spot tender, fixed price. Suppose we are doing a spot tender, and on that spot tender, whatever, suppose we are getting 370 dollar per ton or 350 dollar, whatever, that is a fixed price spot tender for shipment. But that premium I was talking was for the metal, for aluminium. Whatever aluminium we are selling in the domestic market, on that we load some premium. That depends on whatever export. We do some export of the aluminum also. Some metal exports also we do. We do 500,000 tons every month. In that export tender, whatever premium we are getting, that is loaded to the domestic customers.

Sure. So is it fair to say that for second quarter, aluminum realizations could be close to $360, $370 for Nalko?

Yes, already this month, July, we have all spot tenders, Agath spot tender also, somewhere around 370 we are getting. Last spot tender we have done 2-3 back, that also we got 380. So Q2, average 370 I think we will be getting Q2.

Okay. Now, what we have mentioned, the first quarter lesson was around $3.23, and the next quarter we will be expecting $50 more. That is true for tendering our term contract, whatever it is. We are expecting that. Because the price rate, what is now being prevailed, it will give us more, $50 more, that our earlier realized. Okay, first quarter. Got it.

Got it. And my second question is on the box side to Illumina production. Also, for this quarter, we have used kind of 3.2 tons of bauxite for 1 ton of alumina, which is efficient if we compare it to the last few quarters, which was at around 3.5 tons of bauxite. So, any particular reason for this improvement, and can we expect this to sustain ahead also?

It totally depends on the quality of bauxite we are getting from the mines. And basically, we have started a few new phases in there in our mines. So, when the quality of bauxite is good, the part-time consumption of bauxite, it goes down. In the coming days, because we are going to start south block 2 also, where we will be getting better quality of bauxite. Now, our north block, which was a very old block, that was almost exhausted. So, we are starting some new phases where the bauxite quality will be better. So, average specific consumption of bauxite will be getting better.

Sure, sir. Thank you so much. That's it. Thank you.

The next question. Just one query was there on the linkage coal and all that. Our director production is there. He is going to answer that question.

Basically, for our CPP, we are utilizing linkage coal and D and E coal. Last year, we have utilized 47.16 lakh coal from linkage. Through MCL, and also D&D photo collector. We are taking coal from E through E option. For our alumina refinery, and through linkage, last year, we purchased 11.24 lakhs through linkage, and eoxone coal around 7 lakhs. So, approximately 40% coal of total coal used in refinery is purchased through eoxone, and balance is through linkage. Thank you.

Thank you, sir. Thank you. We have next question from Patanjali Srinvarshan from Sundaram Mutual. Please go ahead.

Hi, sir. Thank you for the opportunity. I just wanted clarity on one of the questions.

Sir, please be a little bit louder, sir. Please.

Yeah, my order will now. Is it better?

Yes. Good morning.

Yeah. Yeah. Good morning, sir. So you had mentioned about this premiums for metal at around $110 currently. Can you tell us what was it in the last time when you were done the revision and what was the impact between them and them?

That was last time we have done around five, six months back. At that time, we got the premium was around $60, somewhere around $60.

Okay, but based on what you're saying, your premium has only increased. But I think in your presentation, you had mentioned something like premiums are declining or premiums are likely to reduce, war risk premium. Can you tell me the difference between the two?

You see, the premium totally depends on the demand supply. If the demand is more, the supply is no lesser, the premium will get better. Now, last time when the tender we did, at that time, the supply restrictions were there due to this war situation. Since the war situations are easing out, so even the smelters in the Middle East, they are trying to increase the production. In the subsequent months when this eases out, the premium will go down.

Thank you, sir. I missed one question. Your new alumina refinery that you are starting, what will be the difference in terms of cost of production versus your current plants because the current plants are much older, right?

Cost of production in the expansion unit you are talking? Correct. We have calculated for our expansion unit fuel stream, the cost of production will not be much high because our average, if you see our current cost of production of alumina, this last year it was around 20,000, but this year, first quarter we have got around 22,766 because of the increase in caustic soda and fuel oil, that is HFO. These were the two major contributors that has increased. In our new refineries, which is a 15 refinery, the advantage which we will be getting is that is a pressure digestion, where the caustic soda consumption will be on the lower side. The caustic soda consumption in our existing refinery, which is around 103 kg to 105 kg per ton of alumina production, that should go up to go down to around maybe 85 to 90 kg per ton of alumina consumption. And that will reduce our cost by maybe, I think, by 1000 or 1500 rupees per ton as far as the lumina cost is concerned. And other areas like manpower cost and all that because that is a big unit, one line producing around 1 million ton. Now, from four lines in the existing refinery, from four lines we are producing 2.1 million ton. So, the fixed cost that is the manpower cost will also be on the lower side. Of course, the interest is not there. The depreciation will be loaded. Some depreciation will be loaded on the cost. But what we have calculated, the overall cost of the existing refinery and the new refinery will be almost same. New refinery also coming around 22,000-23,000 will be the cost coming.

Got it, sir. Thank you, sir.

Thank you.

Thank you. The next question is from Palloni Dutta. Please go ahead.

Sir, I just have one question. Just a clarification. Our current Elimina capacity is 2.1 million ton, right?

Yes, sir.

And, sir, after expansion, how much is this going to become?

You see, our current capacity is 2.1, but last year we produced around 2.3. So, we have done 0.2 excess of our capacity. With expansion, 1 million ton will be added. So, after expansion, we are targeting the rated capacity will be 3.1 million ton, but we will be targeting around maybe 3.2 or 3.3 million ton.

And sir, this comes up when, this extra 1 million ton capacity?

1 million ton, this year only 0.2 million ton will be added. From next year onward, that is 2728.

Okay, 2728, we will have full 3.1 million ton.

Yes.

So then, obviously, we have, as of now, we are selling what's closer to 1 million, right?

Last year, we sold around 1.4 million, 14 lakh tons. This year, we are panning 1.6. So, after this goes to the full capacity because in our smelter, we require only 0.95 million tons. The rest has to be sold in the open market.

So, next year, we will get extra 1 million tons. Meaning full?

Okay. That has to be sold.

Okay, sir. Thank you. That's welcome, man. Thanks. And, sir, one more.

Aye.

Ma'am, please press star 1. Follow me, ma'am. For mid-air, we will take Mr. Rajesh Mazumdar from 361 Capital. Yeah, Parvoli, ma'am, is back. Please go ahead.

I'm thinking, what was the cost of this 1,010,000, new refinery?

Around 5,600 crores.

Fine, sir. Thank you. That's all for my... Yeah, and interest, this is all one more thing, sir. This is all internal accrual, right?

Yeah, it was internal accrual. No interest will be loaded. Depreciation only will be there.

Thank you. Thank you so much.

Thank you.

The next question is from Mr. Rajesh Majumda. Please go ahead.

Yes, sir. Good morning, and thanks for the opportunity. Sir, I have a question on the bauxite alumina part. First of all, on the existing bauxite mines at Panchpat Mali, what is the balance life of the Panchpat Mali mines, and what is the reserve there? And Putangi mines, what are you producing right now, and what is the capacity you can go up to next year?

Basically, at our Pachpat Mali bauxite mine, we are having a reserve of around 110 million tons. And in addition to that, we have acquired new mine, which is also having around 110-120 million tons. So, if we take the rate of, present rate of this thing, 85 lakh tonneur, around 8 million tonneur per year if we take, so we can say that the balance life of our Pachpatmali bauxite mine will be approximately 15 to 20 years.

Okay. And I understand that for Tungi mines, the bauxite quality is better due to which the cost of production for the new aluminum expansion is going to be lower. Is that correct? Please repeat. I am saying that the quality of bauxite, which is going to be mined from the Potangi mine, is going to be incrementally positive for the cost of alumina production going forward. Is that correct?

Basically, the quality of bauxite at Potangi mine, we will come to know after detailed exploration and all, after development of mine. So, at this point of time, we cannot be 100% sure that we will be getting that advantage.

Okay, so then how are you assuming that the costisoda requirement for the new expansion will be lower based on the plant specification, not on the bauxite, is it?

Basically, for this year, we will be feeding bauxite from our existing mine to the new 50 stream, and once the production of Putangi bauxite mine starts, Then only we will be using a Potangi mine bauxite and this bauxite both will be mixed and proportionately will be used in our fifth stream as well as in fourth stream.

So then the cost of production is likely to fall further with the Potangi mines being operational fully, is that correct?

I think more or less it will be same.

Yes, because you see when the new mines are operated, the quality is better. When the mines become older, we go deeper, the quality is deteriorating. So this will be a new mine, so the quality will be getting better, and in our new refinery, which is coming up with the pressure digestion, with the new technology, there the costly soda consumption advantage we will be getting due to the new technology in the refinery.

Right, thank you. And sir, I wanted to ask on the alumina realisation one question, because we tracked something on the LME, which is a different number from the one you get on the 370, because LME average for last quarter is 323-25, but you've got 370. Could you tell us which countries the broad breakup of the exports are, and why is there a difference between the LME and your realisation?

As far as you're talking about alumina, no?

Alumina, yes.

Alumina is not directly linked with the LME. It depends on the supply, demand supply of the alumina. Now, earlier we used to get from, if you compare to LME, it was, we are getting around 14, 15 percent. Now it has come down to 10 to 11 percent. So, most of our alumina are going to the Middle East as of now also, around 60-70% of the alumina is going to Middle East by some route or other. And a few of the alumina are also going to maybe Europe, some China, some shipments are going. So, actually what is happening is the bauxite prices have gone up also slightly, New Guinea due to rains and all that. In Rusal, Russia and also China, two of the major refineries today have curtailed the production of alumina because of the red mud issues there. So, some supply temporary supply restrictions are there, which has caused to the increase in alumina spot prices to the level of 37380, which we are seeing with easing out of this war situation and supply requirements in the requirement of alumina in the Middle East, it will continue to the same level.

Right. So, on the long term, the alumina prices will be here towards 14-15 percent of lme, is that the right assumption, as the production comes back in aluminum?

At 14-15, maybe 12-12, 11-12 percent all, because lme on the higher side, lme is around 32-3300. So, alumina, if you see percentage wise, it will not go more than 11-12 percent.

Right, sir. And, sir, my last question was on the net debt. Did you mention that the net debt is 10,000 crore now?

Net debt?

No. Net, net cash. Net cash, sir, net cash.

That is a cash reserve. That is a cash reserve. We are zero debt company.

No, what is the net cash as on the balance sheet as of the first quarter? Cash minus net debt. That is around 10,500. So, that means that through the year, even after your dividend payments, you will end up with a 15,000 crore kind of cash. Is that a correct number? Paran, I have a... It could be the balance cash flow and the capex. And see, if it is a balance cash flow for...

Every year, just, just, our director of finance will explain you every year how much we will be adding in the cash.

Anyway, we have a balance of 10,500 now. Every year, seeing our profitability and the PAT, we are adding 3,500 plus. Because we are expecting earning a PAT of 6,000 plus. This year also, we are projecting to earn 6,000 plus and next year onwards also. So, after paying our dividend and our normal capex expenditure around 1,500 crore. So, and the non-cash item will be added to that, that we will be adding 3500 plus every year. So, when our capital funding will be there, we will have a sufficient care reserve with the hand. So, we can easily finance our requirement through our internal accrual service. Okay.

And that effect on the smelter will be approximately what, 4,000, 5,000 crores per annum?

Yes, yes. Because we have already explained that for a power plant, we have gone for a JV. So, the requirement of fund will be lesser there because that will be funded through depth-equity ratio, depth-30, 70. So, 70-30. So, the balance in our smelter part will be funded through our internal aqual solution.

So, we need not go to the market for borrowing for our...

It smells expensive between our cash reserve and our earning future, earning potential.

And so, one last question if I could sneak in, the capacity of the aluminum right now is on the 950 ports we are operating is 4.6 lakh tons. So, is there a possibility of any brownfield kind of growth there or is it limited to 4.60 only? Like in the case of alumina, you have from 2.1 to 2.3.

Although we are having capacity of 4.6 Lactan, last year we have produced around 4.72, and this year also we are expecting we will be producing around 4.76, 77 Lactan. And we are operating, as on date, we are operating around 958-959 ports.

So, realistically, you can go to 4.75 kind of number, totally, in aluminium.

Yes, yes, 4.75, we are.

Thank you so much. Thank you so much.

Thank you, sir. As there are no further questions from the participants, I now hand the conference over to Mr. Bharat Kumar Shah for closing comments. Please go ahead, sir.

Thank you, Mr. Salendra. On behalf of NALCO, thanks to all the esteemed participants who took out their valuable time and participated in this warning call of NALCO. This shows your keen interest in the business activities of NALCO and also in the future, we expect a similar kind of cooperation from your side. Thank you, KORUS team for facilitating the post-earning call for this Q1 results of NALCO. I also thanks systematic group for continuously hosting this post-earning call of NALCO on a quarterly basis and we solicit similar kind of cooperation in future also. Thanks. Thank you all.

Thank you.

Thank you. Thank you. On behalf of Narco Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.