Nalco Stock Surges 29%, Hits Record High As Market Stalls
Overview
National Aluminium Company (Nalco) shares rallied 29% in one month to a new peak of ₹359.65, outperforming a flat market. Driven by captive mines, cost efficiencies, and strong H1FY26 earnings growth, the PSU company's outlook remains robust despite near-term Q3 headwinds.
Stocks Mentioned
National Aluminium Company (Nalco) shares reached a new intraday peak of ₹359.65 on Tuesday, marking a significant 3 per cent jump. This surge occurred even as the benchmark BSE Sensex edged down by 0.05 per cent.
In the past month, Nalco's stock price has climbed an impressive 29 per cent. This performance starkly contrasts with the BSE Sensex's 1.7 per cent decline and significantly outpaces the BSE Metal index's 8 per cent gain over the same period. The stock has more than doubled, soaring 157 per cent from its 52-week low of ₹140 touched on April 7, 2025.
Mining Advantage Fuels Growth
Nalco's competitive edge stems from its ownership of high-quality captive bauxite mines. These mines fulfill 100 per cent of the company's alumina requirements, enabling cost-effective aluminium manufacturing. The company currently operates two captive bauxite mines and one coal mine, with another bauxite mine slated to begin operations by Q2FY27.
Government-allotted mining licenses, valid until 2029-73 for bauxite and 2051 for coal, provide Nalco a distinct advantage. This secures its operational continuity, a challenge for private miners often hampered by licensing or clearance issues.
Robust Financial Performance
During the first half of FY26 (April-September), Nalco posted a strong net profit of ₹2,497 crore, a 50.15 per cent increase from the prior year's ₹1,663 crore. The company achieved its highest-ever alumina sales of 699,913 MT in H1FY26. Domestic metal sales also hit a record cumulative high of 225,675 MT.
Management attributes this success to enhanced operational efficiencies, cost optimization, and favorable market conditions, including recovering international aluminium prices and steady domestic demand from infrastructure and automotive sectors. India Ratings and Research (Ind-Ra) forecasts EBITDA margins to remain healthy between 25 per cent-30 per cent through FY27, supported by backward integration and cost efficiencies.
Near-Term Outlook and Brokerage Views
While the outlook for FY26 remains positive due to improved coal supply and elevated alumina/aluminium prices, the Q3FY26 preview suggests a mixed picture. Brokerages anticipate strong aluminium prices driven by supply constraints, but Nalco's EBITDA could face sequential decline due to lower alumina volumes and prices, compounded by specific industry issues like the fire at Hindalco's Oswego plant.
