1. At a Glance – PSU With Abs, Not Dad Bod
If you blinked, National Aluminium Company Ltd quietly turned into one of the most profitable metal companies in India. Q3 FY26 PAT came in at ₹1,595 Cr, quarterly revenues at ₹4,731 Cr, and operating margins at a jaw-dropping 46%. Yes, forty-six. For a commodity PSU. Somewhere, a private sector CFO just dropped his coffee.
Market cap stands at ₹70,776 Cr, stock price around ₹385, and ROCE is flexing at 44% while ROE chills at 32.7%. Debt? Almost zero. Dividend yield? 2.7%, with interim dividends flowing like a government-approved waterfall.
Meanwhile, the stock is up ~100% in one year and 113% in six months. This is not a sleepy PSU anymore. This is a cash-printing aluminium behemoth with captive mines, power, alumina, and zero patience for inefficiency.
Question: since when did PSU stocks start behaving like momentum smallcaps?
2. Introduction – From “Sarkari Hai” to “Sarkar Ka ATM”
NALCO has existed since 1981, but FY24–FY26 is where it decided to remind everyone why vertical integration matters. Aluminium prices went up, power costs stayed under control, and captive resources kicked in at the right time. The result? Margin expansion that looks illegal for a metals company.
This is a fully integrated bauxite → alumina → aluminium → power story. No begging traders for raw material, no crying when coal prices spike. If commodity cycles are waves, NALCO brought a surfboard and sunscreen.
But make no mistake — this is still a cyclical business. The current profitability is peak-cycle-adjacent, not a divine promise. The real story is how much money NALCO makes when cycles are kind, and how little it bleeds when cycles turn ugly.
So the question isn’t “Is NALCO cheap?”
The real question is:
How durable is this monster cash flow?
3. Business Model – WTF Do They Even Do?
NALCO is what happens when integration is done properly instead of just written in annual reports.
They mine bauxite.
They refine alumina.
They smelt aluminium.
They generate their own power.
Aluminium segment contributes 73% of FY24 revenue, chemicals (mainly alumina products) the remaining 27%. Volumes have been stable, but realizations swung with global prices — textbook commodity behaviour.
What’s underrated is cost control. Coal mines at Angul, caustic soda JV at Dahej, and captive power mean NALCO doesn’t panic when input prices spike. That’s why margins bounced back hard in FY25–FY26.
Think of NALCO as the Maruti of aluminium — boring, efficient, scale-driven, and allergic to leverage.
Lazy investor test:
Would you rather own a leveraged aluminium downstream player or a zero-debt integrated PSU that throws dividends at you?
4. Financials Overview – Numbers That Slap
| Metric | Latest Qtr (Q3 FY26) | YoY Qtr | Prev Qtr | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 4,731 | 4,662 | 4,292 | 1.47% | 10.2% |
| EBITDA (₹ Cr) | 2,173 | 2,311 | 1,923 | -6.0% | 13.0% |
| PAT (₹ Cr) | 1,595 | 1,566 | 1,430 | 1.84% | 11.5% |
| EPS (₹) | 8.69 | 8.53 | 7.79 | 1.9% | 11.6% |
Annualised EPS:
₹8.69 × 4 = ₹34.8
At a stock price of ₹385, implied P/E ≈ 11.1x — for a company with ROCE north of 40%. That’s not expensive; that’s suspiciously reasonable.
Witty
