Whalesbook
### Margin Pressure Despite Revenue Gains
National Aluminium Company Ltd (Nalco) posted a consolidated profit of ₹1,595.15 crore for the quarter ending December 31, 2025. This marks a modest 1.8% uptick from the ₹1,566.32 crore reported in the corresponding period of the previous fiscal year [6]. Revenue from operations saw a marginal increase, reaching ₹4,730.95 crore compared to ₹4,662.22 crore year-on-year. However, this top-line growth was partially offset by a significant rise in expenses. Costs escalated to ₹2,793.37 crore from ₹2,639.41 crore in the prior year, primarily driven by higher raw material expenses [6]. This dynamic reflects the challenging cost environment impacting the company's bottom line. Despite these pressures, Nalco's aluminium business, which constitutes 73% of overall revenue, experienced a 33% growth [6]. Conversely, its chemical segment saw a 34% decline in revenue [6].
### Dividend Payout and Strategic Expansion
Undeterred by the increased cost base, Nalco's board has approved the payment of a second interim dividend. The dividend is set at ₹4.50 per share on the paid-up equity share capital of ₹918.32 crore for the 2025-26 fiscal year, with a record date set for February 6, 2026 [10]. This distribution signals management's confidence in the company's financial resilience. Nalco, recognized as one of India's largest integrated producers of bauxite, alumina, aluminium, and power, is actively pursuing strategic growth initiatives [3]. Key projects include the expansion of its alumina refinery capacity by one million tonnes through the 5th stream project, increasing total capacity to 3.1 million tonnes. To secure vital raw material supply, the company is developing the Pottangi bauxite mines, having already signed the mining lease deed [3]. Furthermore, Nalco has commenced coal mining at the Utkal D & E blocks, a strategic move aimed at reducing operational costs and enhancing self-sufficiency [3]. The company is also exploring the installation of 200-300 MW of renewable energy capacity with battery storage to support low-carbon aluminium production, though specific negotiations are pending consultant engagement [32, 33].
### Market Context and Competitor Landscape
The company's stock experienced a notable decline of approximately 9% on January 30, 2026, trading around ₹384.60, ahead of its earnings announcement [11]. This market reaction suggests investor apprehension concerning the cost pressures and potential margin compression, despite an overall positive trend in non-ferrous metal stocks [33]. Nalco holds a market capitalization of approximately ₹78,700 crore, with a Price-to-Earnings (P/E) ratio around 12x as of late January 2026 [11, 12]. Aluminium prices have remained firm globally, partly due to Chinese production constraints amidst winter power curtailments and environmental regulations [6]. However, China's alumina prices have softened due to weak demand [6]. In the domestic market, Vedanta reported a substantial 60% rise in profit for its December quarter, driven by strong commodity prices and its dominant aluminium segment, which holds a 46% domestic market share [17, 25]. Hindalco Industries, another major player, has also demonstrated robust financial growth [18]. Analysts forecast global aluminium prices to potentially reach $3,000 per ton by 2026 as supply struggles to meet demand [26]. Nalco's expansion plans and cost-saving measures, such as coal mining, are critical for navigating this market environment and capitalising on future growth opportunities.