1. At a Glance
India’s most well-behaved PSU metalhead just dropped a bombshell quarter. National Aluminium Company Ltd (NALCO) clocked aQ2 FY26 net profit of ₹1,430 crore, up36.7% YoY, onsales of ₹4,292 crore(up 7.3%). The company, trading at just7.05x P/E, is cheaper than your neighbourhood chai stall’s goodwill, yet deliversROE of 32.7%and aROCE of 44%— numbers that would make private-sector CFOs weep into their spreadsheets. Themarket cap stands at ₹43,100 crore, with adividend yield of 4.47%because PSU = paisa nikalta hi rahta hai.
The stock has sprinted25% in 3 months, returning a solid49% in 6 months, proving that even bureaucrats can mint gold if they’re sitting on 68 lakh tonnes of bauxite. As if flexing wasn’t enough, the board just declared a₹4 interim dividendworth₹735 crore, record date November 14, 2025.
OPM at 45%, PAT margin 33%, debt negligible, and expansion plans worth ₹25,000 crore locked in — NALCO has gone from dull PSU uncle to gym-fit aluminium champion.
2. Introduction – The Phoenix of Bhubaneswar
Once mocked as a sleepy Navaratna PSU known only for its fat board meetings and thicker annual reports, NALCO has turned its smelters into money printers. Born in 1981 under the Ministry of Mines, it’s one of thelargest integrated Bauxite-Alumina-Aluminium-Power complexes in Asia— and arguably the only government baby that didn’t turn into a bureaucratic black hole.
FY25 saw NALCO record itshighest-ever profit of ₹5,325 crorewith₹16,788 crore in revenue, a210% dividend, and zero debt hangover. In a world where private aluminium players fight margin wars and Chinese dumping, NALCO quietly refined, smelted, and exported its way to glory.
It’s a story of metal, minerals, and meticulous PSU discipline. The company mines its own bauxite, refines it to alumina, and smelts it to aluminium — all powered by captive coal-fed electricity. In short: full vertical integration, full government ownership, and full desi swag.
And unlike most PSUs, it’s not a scam headline waiting to happen. In FY24, it ran at110% mine utilization,100% smelter capacity, and93% refinery capacity. Imagine working that efficiently when your boss is literally “Government of India.”
3. Business Model – WTF Do They Even Do?
NALCO’s business model is a bureaucrat’s dream turned capitalist reality. The company operates two primary segments —Aluminium (73% of FY24 revenue)andChemicals (27%).
Let’s decode the desi metal cocktail:
- Aluminium Division:The real moneymaker. Think ingots, billets, strips, wire rods — basically everything that goes into your car chassis, aeroplane body, or that fancy aluminum water bottle influencers pretend to recycle. Sales volume rose to4.7 lakh MT, up 3%, but realisations fell 8% due to global metal price volatility.
- Chemicals Division:Produces alumina hydrate and calcined alumina, crucial for ceramics, refractories, and water treatment. Sales slipped 5% to11.68 lakh MT, with prices down 4%.
- Power Division:A silent hero. The1,200 MW captive thermal power plantensures self-reliance, while198 MW of wind poweradds green bragging rights for the ESG crowd.
Every rupee earned is baked, refined, and smelted within India. With Utkal-D and E coal mines operational, NALCO now self-feeds its energy monster, reducing dependence on costly e-auction coal.
And they’re not stopping there — a₹17,000 crore new smelterand₹8,254 crore alumina refinery expansionare on the anvil.
In other words, they’re mining bauxite but minting confidence.
4. Financials Overview
| Metric (₹ Cr) | Latest Qtr (Q2 FY26) | YoY Qtr (Q2 FY25) | Prev Qtr (Q1 FY26) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 4,292 | 3,999 | 3,807 | 7.3% | 12.8% |
| EBITDA | 1,923 | 1,533 | 1,478 | 25.5% | 30.1% |
| PAT | 1,430 | 1,046 | 1,049 | 36.7% | 36.3% |
| EPS (₹) | 7.79 | 5.70 | 5.71 | 36.7% | 36.3% |
Annualized EPS: ₹31.2 →P/E = 7.5x.
Commentary:At this point, the only thing more solid than NALCO’s profit is its bauxite deposit. Revenue grew modestly, but margins rocketed to 45%. PAT margin = 33%, i.e., one-third of every rupee goes straight to the treasury (and eventually into your subsidies).
5. Valuation Discussion – Fair Value Range (Educational)
Let’s crunch some fun PSU algebra.
Method 1 – P/E ApproachEPS (TTM) = ₹33.3Industry P/E = 19xNALCO’s conservative P/E range (8x–12x):→ Fair value = ₹266 – ₹400
Method 2 – EV/EBITDA ApproachEV = ₹35,569 Cr; EBITDA = ₹8,454 CrEV/EBITDA = 4.2xIndustry average ≈ 6x–8x→ Fair range = ₹320 – ₹430
Method 3 – DCF (Simplified)Assuming cash flow ₹5,800 Cr, growth 6%, discount 12%:Fair value ≈ ₹290 – ₹370
✅Educational Fair Value Range:₹266 – ₹430📜This range is for educational purposes only and not investment advice.
6. What’s Cooking – News, Triggers, Drama
The press releases read like a PSU success montage:
- Record Q2 & H1 FY26:Best-ever half-yearly profit ₹2,497 crore.
- Dividend Bonanza:₹4/share interim dividend, record date November 14, 2025.
- Expansion March:Fifth alumina refinery stream (₹8,254 Cr) and 0.5 MTPA smelter (₹17,000 Cr) on track.
- Lithium Leap:JVKABILinked a deal in Argentina forfive lithium mines worth ₹200 Cr.NALCO now dreams of being India’s “Battery Daddy.”
- Pottangi Mines Lease Secured:50-year lease with 75 MT bauxite reserves.
- Minor Drama:NSE and BSE fined NALCO ₹7.5 lakh each for a late board committee update — the corporate equivalent of being fined for crossing an empty red light.
So yeah, between mining aluminium and mining lithium dreams, NALCO’s boardroom is busier than a Delhi metro station at 9 AM.
7. Balance Sheet – The PSU Flex Table
| ₹ Cr | Mar FY23 | Mar FY24 | Sep FY25 (Latest) |
|---|---|---|---|
| Total Assets | 17,627 | 19,235 | 25,005 |
| Net Worth (Equity + Reserves) | 13,126 | 14,388 | 19,836 |
| Borrowings | 105 | 96 | 56 |
| Other Liabilities | 4,396 | 4,751 | 5,112 |
| Total Liabilities | 17,627 | 19,235 | 25,005 |
