National Aluminium Company Limited analyst Q&A

Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask question may please press star and one on the touchtone telephone. If you wish to remove yourself from the question queue you may press star and two. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment where the question to assemble. The first question is from the line of Aditya Welekar from Axis Securities. Please go ahead.

Congrats for the great set of numbers. So just wanted to understand on alumina front, if you can throw any guidance on FY '27 production and sales vo lume, both on alumina and aluminium?

FY '27, if you see, our target is our 5 th stream refinery is coming. So we are planning to add because commissioning will start in June and ma ybe take three, four months to reach to the production level. So, this y ear, optimistic planning we have done of 2 lakh tons. So around 25 lakh tons of alumina production and sales we are planning. That is around 2 lakhs mo re than the previous year. And it will further increase as far as the commissioning process goes. As far as the metal production is concerned, metal production again, we have targeted more than this year, slightly more because we have alr eady reached to the upper limit. Our capacity is 4.6 lakh. Last year, we hav e done around 4.71 lakh tons of metal production. This year, we have planned around 4.73 lakh tons of metal production. So, both areas in alumina and me tal, we have looked for the growth.

So, what is our exposure to Middle East in terms of alumina exp orts? Is there any impact on the sales volume next year?

Our alumina export to the Middle East, of course, that was goin g earlier in the previous years, a lot of around 40%, 50% of our export was going to Middle East, which has got affected. But now from Indonesia and other places also orders are there. Of course, that has resulted into the reduction in the spot prices. The spot prices has gone down to as low as around $310 to $305. That is the effect of the war. So once this smelters of the Middle East, th e production curtailment is there till they reach to the fullest capacity, t here will be effect on the alumina pricing in the spot prices.

And in terms of volumes, any impact on sales volume because of this disruption there?

Sales volume till now, no. Our volumes, whatever spot tender we are doing, we are getting the orders. In fact, in our last -- spot tender, we got the order of around 336 orders we are getting. We are trying to increase our presence in the domestic market also. Like last year '24-'25, our domest ic sales was 40,000 tons. This year, '25-'26, we have done around 140,000 tons. We have increased the volumes in domestic sales by around 1 lakh tons. This year, again, we are targeting to further increase go to around 2.5 lakh tons to 3 lakhs tons, I think, something like that. So, we are targeting domestic market to further increase the v olumes. And we are trying to have some long-term relationships, long-term engageme nt with smelter manufacturers across the globe so that we have the comfortabili ty of selling aluminium to the smelters.

The next question is from the line of Manav Gogia from Yes Secu rities Limited. Please go ahead.

First of all, congratulations for the strong year that you've h ad. Sir, one question follow-up from the previous participant. Could you give me the average alumina realization price for the quarter? And how is it shaping up in Q1?

Quarter means which quarter you are asking?

For Q4, what was the average alumina realizations? And how is… [Inaudible]

Q4 '25-'26 average realization was somewhere around 3,000/tons. Alumina, you are talking or aluminium?

Alumina?

Alumina, it is $348. $348 was there in Q4.

Okay. And how is Q1 looking?

Q1, it was $460. Q1 this year?

Q1 it is go down, it'll further go down. It is around 320 average we are getting now.

Okay. Sir, just one question. Are we….[Inaudible] because alumi n i u m p r i c e s a r e quite strong, are we doing any.. [Inaudible] putting any hedges in place or it's going to be directly linked to LME, how we have been doing till now, for aluminium?

Hedging, we are not doing. It's directly linked to LME. Since L ME is on the rise. So that's why we don't require to do any kind of hedging.

Okay. Got it. And sir, for volumes for alumina, you just stated that we are going to be doing incremental 2 lakh tons from the new refinery. Earlier , we were targeting 50% utilization, then we had got it down to 30%. Now we are sort of at a 20% to 25% utilization. So I mean, are we expecting some delays? Or is it, how should we look at it?

In fact, not delays. We were expecting by June. Yes, some delays will be there because we were expecting that by June. We will be completing t he total production commissioning process. But in June, we are starting the commissioning process, which may take two, three months to comp lete it. Two lakh is a very optimistic figure which we are targeting. Ma ybe it can further go up if the commissioning process is completed early.

Okay. And sir, my second question would be where are we in the process for the new aluminium smelter? And how should we take a look at the capex number going ahead for the next two, three years now?

The new aluminium smelter already we have placed the order for making DPR for both smelter and our power plant. The preparation of DP R is under progress. Technology licenser already we are appointing. Our target is by this year, may be September, October, August, September, we will be able to complete the DPR, get the Board approval and start the tendering process for procurement, which will take six to seven months, means next mo nth, next year, April, May, we can complete the ordering and start the ac tual groundwork and it will take around three and half years from there. Our target is by December 2030 or maybe early 2031 to complete the overall commissioning.

Okay. Got it. And how does the capex number look for '27 and '2 8? And where can we see the capex peaking out?

Capex, like this year, the capex will not come, but '27-'28, the capex will start coming once the ordering is done. So capex will further capex p hasing, how much have we have done?

'27-'28 [inaudible].

Capex will be around Rs.4,000 crores. This year we are targetin g around Rs.1,800 crores to Rs.2,000 that is '26-'27. '27-'28 somewhere around Rs.4,000 crores and similar kind of capex it will further increase because our total investment will be around both if you see power plant and this will be around somewhere around Rs.30,000. So that will be phased out i n around three to four years from next year onwards, that is '27-'28 onwards. So maybe first year will be around Rs.4,000 to Rs.5,000. Next year, it will further go to around Rs.8,000 to Rs.10,000.

'28-'29 and '29-'30 it will peak out.

Peak out to around Rs.8,000 to Rs.10,000 from that level.

Thank you, the next question is from the line of Pinakin from HSBC. Please go ahead.

First of all, can you give us the alumina and aluminium cost of production in the fourth quarter? And what would it be today in 1Q given the cost inflation that we are seeing?

If you see the cost of production of our alumina and aluminium, alumina, our cost varies from Rs.20,000 to Rs.22,000 in between, okay? And i f you are talking about aluminium, it is Rs.155 to Rs.100 [Inaudible] Rs. 155,000 to Rs.160,000, that is the rate. But the first quarter, the cost will not increase much, though there is some increase in the input cost. But since our employees costs are g etting down because of the high paid employees are getting retired and we a re recruiting new one. So whatever extra cost we are incurring in the input c ost, that will be set up by our fixed cost. Reduction in fixed cost, employees cost, power and fuel. So there will be much hike in the cost. It will be varied in that range only within Rs.160,000.

So sir, that's very good to hear. But do you expect that trend to continue in the second quarter as well because we are seeing caustic and fuel oil and carbon prices all rise very sharply?

You are expecting that what is. Suppose there is increase in th e caustic and CTP, but we are going to increase coal supply from our captive mines. Our captive mines we call it D and E. That will give us some comfor t. Whatever cost we will be incurring [Inaudible] cost in the input cost ou tside FCA, that will be to a great extent will be compensated the reduction of the power cost, coal cost from our captive mines. Because in the next year, we are going to increase production by 8 lakh more. So that comfort we will be getting.

Got it. Sir, my second question is that the Japan aluminium premiums have risen very sharply from just around $100 to nearly $300 per ton. For NALCO's aluminium sales, what were the premium that the company realized in fourth quart er? And what do you think will be realized now?

Metal, We have a pricing policy. We don't changes frequently the premi um part. We have a mechanism of pricing calculation, and we have f ixed premium I think six, seven months back. That pattern we are following. So it is linked to the LME. So we don't change our premium frequently because that is a transparency policy we are following. So that gives very confident to all of our stakeholders. So we don't link it to the upper premi um regularly. It is fixed. I think last year, it was fixed and that is continuing. We don't change it.

Do you expect to revise it anytime soon, sir, given that the premiums have risen very sharply across Asia?

Maybe some [Inaudible] within a month or two, we'll be going fo r some export tender and whatever premium we will be getting there [Inaudible]. We go for export tender within every six months, something like th at. And whatever premium we are getting, that we adopt for next six months. So we'll be going for export tender and whatever premium we get, then we will include in our pricing policy.

Got it sir, this is really very helpful. Thank you.

The next question is from the line of Pallav Agarwal from Antique Stock Broking.

Just a question, you mentioned about the employee cost coming d own. But in this particular quarter, we've seen a lmost a 13% increase Y-o-Y and a 26% sequential increase compared to third quarter. So, is there any one-off or any gratuity provisions that were there in this quarter?

You're telling quarter-to-quarter.

Yes, employee costs.

Employee cost overall year-to-year, it has gone down, 18% to 15%. Year-to- year, if you see it has gone down. Last financial year, it has gone down by around Rs.65 crores employee cost because we have retirement of around 351 people, and we have inducted around 358. But whatever retirement was in the higher scale, and the induction is in the lower pay scale.

Some of the provision is being made at the end of the year, act ual variation, everything. And if you see the overall '24-'25 and '25-'26, there is a reduction of 2%. '24-'25 our employees cost composition of total expendit ure it was 18% and this year it is 16%.

Sure. And we expect this to continue, right? In FY '27 also, we don't see a material increase.

I think it will continue. This year [Inaudible]

FY '27 also further superannuation is around 250 numbers and our recruitment will be also similar kind of thing. And superannuating staff is always on the higher pay scale and the people joining are on the lower pay scale. So similar kind of savings will be there.

Sure, sir. Also on the other expenses, again, maybe because of the fourth quarter, there's been a significant increase on a Y-o-Y basis at about Rs.850 crores. So again, is it some year-end provision, which will probably not [Inaudible] other expenses, it's about Rs.850 crores for this quarter.

Other expenditure actually we have made some extra provision because of the statutory reason our red mud pond. So there is a statutory provision that after you utilize that red mud pond, you have to give a complete cover of that which is green and everything that we have made a provision of around Rs.40 crores for that. Second additional provision we have made for our flyer situation because the nearby area where we are used to dump our flyers that has been exhausted and we have to transport further distance. So we have made a pr ovision of transportation cost. So that [Inaudible] I think we have kept R s.54 crores additional. These are the expenditure we have taken in the four th quarter. So that's why there is some additional impact [Inaudible] only the provision, not the cash expenditure. That is only provision.

Sure, sir. Also, sir, what was the capex that we actually incurred in FY '26?

FY '26, around Rs.2,000 crores.

Our target was Rs.1,700 crores, but we have exceeded by almost Rs.400 crores more.

Sure, sir. Sir, just lastly, coming back to the alumina pricing scenario. So I think you had earlier mentioned that Indonesia, the smelters were delayed , but the alumina refineries had come on stream. So, there was a pressure on pric ing. So by when do you expect this to probably normalize and the smelting capacity to start operation in Indonesia?

Indonesia smelting capacity is going to start this financial ye ar end, some of the smelting capacities. But in spite of that, their refineries capacities are on the higher side. There will be an excess of alumina in the mark et every time this year or maybe next year. And with this, some of the smelters in the Middle East is going down and their revival itself will take around se ven to eights months or maybe one year. So, this year, this financial year, t here will be an excess of alumina in the market and the pressure on the pricing will be there.

So, I think in the Middle East, there was some alumina refinery capacity also. So is there any impact on that or that is operating at normal levels right now?

The refining capacity is less than the smelting. They were impo rting the alumina. So, refinery as of now, we don't have any update on th e refining capacity, whether it has any effect on that. But of course, sme lters, three smelters, Qatalum in Qatar and EGA, Dubal and one more smelter has got affected and they reduced the production by around 50%. So that's why their overall alumina consumption has gone down.

The next question is from the line of N. Modi, an Individual Investor.

Sir, what percentage of this coal and caustic soda we are able to produce?

What percentage of coal… overall coal requirement is around 7.2 million ton. Out of that, last year, we have produced our own, Utkal mines h as produced around 4 million ton. This year, we are targeting 4.8 million t on. That is our in-house coal production. Out of 7.2 million, 4.8 million this year we will be producing. And as far as caustic soda is concerned, around 50% our total requirement is produced in our JV that is in GNAL.

And balance we are procuring from outside?

Rest caustic soda, we are procuring from outside and coal maybe around 2.7, 2.5 million to 2.7 million tons we source from MCL through our linkage route [Inaudible] fuel supply agreement route.

One more thing, sir. This price of caustic soda has gone up during the last two, three months?

Yes. The cost of caustic soda has gone up. It has gone up by how much?

Caustic soda if you see last year average, it was [Inaudible] beginning of the year, it was around Rs.38,000. And '25-'26 average cost is around Rs.42,000. And first quarter, we are expecting Rs.45,000.

From Rs.42,000 to 45,000 it has gone in last six months.

The next question is from the line of Vikash Singh from ICICI Securities.

Sir, my first question pertains to your previous remarks that y ou said coal would be 4.8 million tons from the captive sources next year. So have we received the EC clearance because as far as we are concerned, I think we had.

That is almost under process, and we are very much sure that in t h e n e x t coming three, four months, we'll get it.

Sir, second question pertains to other rare earth lithium proje cts which we are about to take off. So anything happened in KABIL or any other segment, any talk is there? If you could give us some idea.

So regarding there was a lot of news of us about exploring the rare earth and critical mineral assets as well. Apart from the KABIL Argentina mine, ha ve we scouted or zeroed down on anything else?

Apart from KABIL, we have taken two, three projects. Gallium re covery is one... [Inaudible] Jagdish Arora In rare earth and critical mineral, we have a huge amount of red mud lying with us and there are some projects we have taken it up. And in coming times, there are some visibility that we will be getting some valuable items from thi s. But presently, these all are at pilot scale level. It will take another two, three years to firmly decide upon the value which we will get out of this. But in some of the projects like gallium extra ction project, we are at advanced stage of putting up a pilot plant, and we'll get the f irst right of extracting and putting up a gallium plant down the line after two, three years.

Noted. Sir, just lastly, when we will be starting spending capex on the 0.5 million ton aluminium smelter? When we can expect that project to take off and the capex will start going in?

That will happen to be [Inaudible] capex will start in '27, but that will be starting of the capex. But the main capex cycle will start in '28-'29 and ' 29-'30 will be the peak capex cycle, and we'll be completing it by 30 or 30 month first h a l f . So we ' l l b e starting in '27 and three years we'll be completing our 0.5 million manufacturing.

So what could be FY '27 and '28 capex figure if we need to build in our estimates?

For 0.5 million tons it will be around Rs.18,000 crores.

'27-'28 he is asking..

'27-'28 is around Rs.4000 crores to Rs.5000 crores will be '27-'28. After that, the capex will further increase. Next three years, it will go to around Rs.8,000 crores to Rs.10,000 crores.

Because smelter will come with a power plant also 270 into 4-megawatt power plant also is there. So capex will be considering both of the projects.

Okay. So majorly Rs.4000 crores majorly for the smelting plant in FY '27? Is that a correct assumption?

Yes.

I got disconnected, so please excuse if it's already discussed. My first question is on coal. Can you just remind us what was the captive coal producti on for FY '26? And for '27, what is the expectation? And then the remaining coal, which is roughly around 3-odd million tons, which we are buying from Coal India, if you could just share what is the mix between linkage and E-Auction?

As far as our coal production, FY '26, we have done 4 million t ons. And this year, we are targeting 4.8 million tons. Rest of the coal, we are taking through FSA linkage route from Coal India. E-Auction, very less quantit y we are taking. I think out of the total quantity around 10%, 15% only we are taking from E-Auction route out of the remaining around 2.5 million, 2 .6 million tons. Rest we are taking through linkage route.

Okay. And roughly, what would be the cost difference between li nkage, E-Auction and captive coal?

Between our captive and this linkage coal, the difference is around Rs.300 per ton. And in captive to linkage, if you see captive to E-Auction , it will be around maybe Rs.600 to Rs.700.

In '25-'26 our linkage coal cost is around Rs.1800 and our capt ive Utkal is Rs.1500.

Rs.300 difference that is captive and linkage.

E-Auction coal is slightly higher Rs.2100.

It will be around 600 difference in E-Auction very less quantity we are taking. Around only 10% to 15% of the total requirement.

Sir, second on the employee cost, can you guide us for next one or two years, what is our expectation? What is the employee count currently? And what is the retirement expectation over the next few years?

Yearly retirement is around 250 numbers will be retiring next four, five years. Our recruitment this year, we'll be doing around maybe 200, 250 recruitment t h i s y e a r . N e x t y e a r , w e w i l l s e e a s p e r o u r r e q u i r e m e n t w e w i ll do. So employee cost will go down because the retiring people are in a very high scale of basic NDA they are in. So that will further go down because you see this year, our overall employee cost was around Rs.1,721 crores overall expenditure on employee . And last year, it was Rs.786 crores. Rs.65 crores, we have saved on empl oyee cost. And it is coming overall 10% of the overall expenditure. So it will slightly reduce.

What is the count today around 4,600?

Strength is around 4,900.

Sorry 4, 8?

4880.

4880

Because sir, we were expecting the similar around 300, 400 deduction recruitment of 200-odd, but year-on-year, there's no change. Last year also, whatever number I have, it's around 4,800.

Yes. Similar kind of thing, the people retiring and similar kin d of people we are recruiting same number. But our 5 th stream which is coming [Inaudible] since we are going for expansion, the 5th stream which is coming for that we will be requiring an additional manpower of around maybe 200 to 250 for which our recruitment process has started. So that [Inaudible] in that area since our volumes will also be increasing so some additional ma npower will be required there.

Okay. And the pay commission impact, when do we start seeing th at? What is the estimate?

Pay commission impact will start from January '27.

There will be some impact because of [Inaudible] The last quart er of this fiscal and from next financial onwards, average increase will be 10% to 15%. But if you see the overall cost because our volume will increase. So if you see the per ton of cost, it will be coming down. Though the absolut e figure may go up, but per ton will be coming down because of volume.

So roughly around Rs.2,000-odd crores is what we can expect from FY '28?

FY '27, '28 now it is Rs.1,700. It may affect, Rs.100 crores maybe additional cost…15% of the cost.

The next question is from the line of Darshan Mehta from Dolat Capital. As there is no response, we'll move to the next question which is from the line of Naresh Naiker from Systematix.

I have questions on chemical segment. If you see the revenue wa s see fall. It is 12% decline from Rs.7,600 crores to Rs.6,694 crores. So I want to know what are the main primary factors this happen and when the situation will normalize. And going further, how do you see the volume and realization on this segment?

You are talking about reduction in the revenue from chemical sector?

Yes, revenue and margin both.

Chemical sector, you see our prices has gone down by around $219 compared to last financial year, which has resulted into less revenue of around Rs.2,659 crores. That is the amount of loss we have suffered due to redu ction in the spot prices. But we have compensated it by increasing the volume. We have sold around 3.4 lakh tons of excess of alumina by incre asing our v o l u m e p r o d u c t i o n , w h i c h I h a v e t o l d e a r l i e r a l s o t h a t w e a r e targeting to increase the volumes. We have increased the volume of around -- production by around 2.5 lakh to 3 lakh tons. So it has given us a additio nal favourable impact of around Rs.1,714 crores. So net adverse impact of alumina is around Rs.784 crores only in spite of Rs.2,660 crores of adverse impac t due to pricing.

The next question is from the line of Akshay Ajmera from Nirzar Securities.

Congratulations on very good set of numbers, sir. Sir, what wou ld be your view on the alumina prices going forward, looking at the amount of surp lus that is available due to shutdown of some of the smelter in Middle East, etcetera ? Do you think that it's now at the bottom? Or do you see still scope of the prices going down? That's number one. And also similar outlook on the prices of aluminium?

As far as alumina prices are concerned, it is almost on the bot tom. We are -- whatever spot tenders we are doing, we are getting the price of around $310 to $320. In few tenders, we are getting $330 or $336 also. But what we are expecting for this fiscal, this financial year, it will be some where around between $300 to $310 average alumina pricing will be there. Metal pricing, of course, at present, it is at the peak around maybe $3,600 LME is there. We are expecting that it should be somewhere around average, if you see the average of the total year, somewhere around 3,000 it will come down once the wars are over and all that, the situation normali zes. But somewhere around 3,000 because already the demand-supply gap wi ll be there. We expect that it will be LME somewhere around 3,000 ave rage we will be getting.

All right, sir. And as you have mentioned that our prices are l inked to LME and we do not do more frequent revision in our prices. So can we see - - can we assume that it is basically some sort of a long-term arrangement?

It is not a long-term arrangement because LME keeps on changing. And every three days, we keep on changing our price as per the variation of the LME is there. And the premium, we do the export tenders. Every six mon ths, we do the export tenders. In between also sometimes we do. And depend ing on whatever the premium we are getting on the export tender, we fi x up the premium.

So how much would be spot and how much would be long-term contract in alumina and aluminium both?

You're telling alumina, most of our alumina is going on spot tenders because every month four shipment we are doing on spot. We have done so me -- a few of the tenders on the long term, that is three months and six-month tender also. Now at present, we don't have long term because since the pricing is very low, we are not going for the long term now. We are only relying on the spot tenders. Once the prices slightly stabilizes, these war situations are over, we'll try for some long-term contract also.

And are we on track with our expansion plan for alumina and aluminium?

Alumina 5th stream expansion, our target was June, we will star t the commissioning. June, we will be starting the commissioning. Commissioning process takes three to four months because it is a chemical plant, process plant to stabilize the production and reach to the 50%, 60% of the ra ted capacity. So as far as of now, we are on track, maybe one or two months delays, we are expecting depending on what happens when we start the commissio ning process.

Lastly, we have also mentioned in our results that the Board ha s decided to discontinue the Utkarsh JV with Mishra Dhatu Nigam. So are ther e any plans for going in value-added product? Because earlier it was envisaged that we will be going into value-added products in defence and aerospace and like tha t. So what would be the plans going ahead? And how much --

Actually, Utkarsh JV was made and that basically, at that time, the forecast was that growth in the transportation sector will be there. Of course, defence sector requirement was there, but defence sector requirement wa s very less. And the kind of capex involvement was there around Rs.4,500 cro res to Rs.5,000 crores capex was required for that. And as of now, the requirement in the transportation sector has not grown like that. That's why it is not looking that much favourable. Even the IRR with the capex investment wa s coming negative. That's why we are not going ahead with that. As of our existing plant is concerned, we are going for one more wire rod mill to increase our wire rod production. Wire rod also we considere d as a value added. And the new wire rod mill will be producing more of alloy grade wire rod and good quality wire rods. Around 60,000 tons of wire rod mill we are going in. It will take around two years. Our flat product rolled product plants, we are adding MI annealing furnace that will increase the produ ction from our roll plant. Rolled plant on an average, we are doing around 2,000 per month. We are targeting from this year onwards around 2,500 tons per month. That will again be value added. These are the two areas where we are working to increase our value- added presence in the existing operation. Of course, in our exp ansion, we will be targeting more of a value added that is wire rods, maybe some r olled products or maybe billets, something like that.

The next question is from the line of Jay Thakkar from Pinnacle.

I'd like to know in the beginning, you mentioned that your addi tional capacity in alumina would be 2 lakh tons. That was your optimistic approach, right? What would be a conservative approach?

I think I don't know. It's very difficult to tell. It depends on the commissioning process, optimistic and conservative. Two lakh is the minimum w e are targeting. It can go to maybe 3 lakh or 3.5 lakhs also, dependi ng on the commissioning process.

The next question is from the line of Rajesh Majumdar from 360 ONE Capital.

I actually missed out on the employee cost increase in FY '28 o n account of the pay commission. What is the percentage increase you said in FY '28 will happen on the employee cost?

Around 10% to 15% increase in the employee cost will be there. That will be the impact of pay revision in between 10% to 15%, it can be aro und 12% to 13% also.

And my second question was, sir, on alumina exports. What is th e figure for the exports for the year? Because you have given the total aluminium [Inaudible] alumina hydrate sale of 14.46. But what is the export figure and what is the domestic sales?

If you see the export sales, we have done alumina export sales, we have 1.38 is domestic and export sales, we have done around 13.09 lakh tons and around 1.37 lakh tons of domestic sales. So total [Inaudible]

1.37 lakh tons, is this calcium alumina or special grades?

It is combined, consigned and hydrate, both.

Okay. And special grade alumina, what would be the production?

And in the new capex, there is no increase in the special grade production. It's called calcium alumina, right?

No. Only consigned and hydrate will be there.

And sir, my last question was on the aluminium smelter and powe r plant. Initially, we had talked about putting the power plant in a kind of joint venture structure with NTPC or somebody like that. But now are we doing it on our own entirely going to be the full capex to be borne by NALCO or there's no joint venture…

Already, we are into agreement with Neyveli Lignite. We have si gned one MOU with them. We are in the advanced stage of negotiation with them, with Neyveli Lignite Corporation for forming a JV company in which 5 0-50 partnership will be there because Neyveli Lignite has got a coal mine here in Talcher, and that will be very near to our CPP. So we will be h aving a coal security also for our expansion. So now we are in the advanced state of forming a JV company.

So the entire capex is not going to be borne by NALCO?

Yes, yes. The capex will get shared by both the JV companies.

And just one last question, sir, if I could squeeze in. On the bauxite royalty, if I look at the other expenses sheet, the figure on royalty has varied a lot. In the COVID year, it was like below Rs.200 per ton. And then like now after COVID it was Rs.600 and now it is somewhere around Rs.300. What is the figure of the ro yalty? And what is the royalty charge on the new bauxite mines? And will there be any revision in the royalty on the old bauxite mines?

Royalty figure will changes since the LME is high royalty will be high. Because it is calculated by calculation.

So it is not specific. What is the percentage?

Percentage of royalty to LME [Inaudible] percentage it is 0.56 percentage, I think. It is calculated content of alumina and bauxite in that pattern it is calculated. It is coming around royalty per ton Rs.450.

Currently it's coming around 400, but if LME increases it will go further.

And on the new mines also is the same?

It is. Quality is almost 42% alumina. And it is direct linked to LME, that's -

On the new mines also the royalty will be same.

Sir, my first question regarding export market, maybe I missed. As you said 40% to 50% of your export come from Middle East, sir?

50-52% of export, you are talking about chemical…Alumina?

Yes, alumina.

Alumina our total sales last year was around Rs.3.4 lakhs, we have increased. Total sales export, we have done around Rs.13 lakhs and domesti c, we have done around 137,000. So export sales is -- domestic sales is al most around 10% of the export.

And how much is from Middle East?

Middle East, what I was telling earlier also, around 40% to ear lier -- 45% to 50% used to go to Middle East, maybe sometimes more also. But n ow it has gone down.

And what is the outlook for FY '27 specifically for Middle East export. This will come down further?

It will depend on the war when the war ends. It's very difficul t to predict if the war ends and because now the route is also closed, whatever route is there, whatever alumina was going, it going through the Strait of Hormuz. So that's why we have to take it to some road route. So it's very difficult to predict now.

My last question, you said alumina price will come down again f or $300 to $310. Any impact on margin front for this will come down because…

Any impact on margins you're telling margins means already compared to last year, it has gone down. Last year, our average alumina price wa s in '25-'26, you see it was $376 average which we have got. In '24-'25, it was $570. Now this year, we are targeting around [Inaudible] we are seeing[In audible] expecting that around $300 to $310. So that will [Inaudible]

And how much it has go down as per your calculus sir?

I think it will not affect the margin as a whole because if you would not getting price in the alumina, but it is being compensated through metal price because the -- talking about alumina.

Alumina might be down. But for NALCO overall, I think there wil l be no impact on the price front…

Why I was asking because as you say aluminium price will [Inaud ible] but alumina prices will come down. So your aluminium prices will scale down Rs.3,000 and alumina price will come down compared to last year, then overal l margin will come down sir?

Overall margin will not go down. You see our overall revenues, around 70% of our revenues is coming from metal, that is aluminium and 30% of our revenue. This year, it went down to around 27%. 73% from alumin ium and 27% from alumina. So we are getting better margins on aluminium. So it will not reduce it. In fact, it will increase our margins.

The next question is from the line of Ashish Kejriwal from Nuva ma Wealth Management.

Sir, quickly, a few questions on the raw material side. Are we seeing how much price increase in coal, which we are buying from E-Auction? What kind of price increase we have seen in last two, three months -- two months actually?

E-Auction actually, very less quantity coal we are buying. On s uppose if we are buying around [Inaudible] we are taking coal from FSA route through Coal India, NCL, that is around 2.5 million ton. Out of that ar ound 10% to 15% only buying in the E-Auction route. And that is approximately Rs.200 to Rs.300 more than the fuel supply agreement which is there with them. As I said through linkage route. So Rs.300 more we are getting.

So sir, actually, in last two months, have we seen any increase in E-Auction coal price in last two months?

Two months, since we have not done any [Inaudible] we have done [Inaudible] last two months, we have not done any [Inaudible]

E-Auction coal, if you compare with the last year average price and current year, there is a reduction because it is a notified price plus some premium. So last year, it was average cost to us is Rs.2,700. And this year , '25-'26 it is Rs.92,400 totally. So there is a trend of reduction of price if you compare it to the previous year.

Understood sir. I was just looking at last two months because we have seen increase in [Inaudible]

Due to war situation you are telling any increase in the [Inaud ible] It has not increased in fact. It has not increased because there is an exc ess of coal available also. Coal production capacity has increased. So your question is the main issue. So E-Auction coal prices have not increased.

Most of my questions are answered. I just sorry if I'm repeating the question again. So can you just briefly mention the capex numbers that you mentioned, I guess, to a participant before for '26-'27 and then factoring for aluminium capacity?

This year that is '26-'27, we are targeting a capex of around R s.2,000 crores. Next year onwards, that is '27-'28, what I told earlier also, s omewhere in between Rs.4,000 crores to Rs.5,000 crores. And after that, the subsequent year, it will further go up. That will be the peak time of smel ter erection and all that. That will go to maybe Rs.7,000 crores to Rs.8,000 crores.

In totality, it's 30,000 crores that you [Inaudible]

It is not 30. Actually, it is smelter is 17,000 crores to 18,00 0 crores and our power plant is around 12,000 crores. Since power plant, we are going for JV, only 50%, maybe 5,000 crores, 6,000 crores will be requiring fo r that. So it will come down to around 23,000 crores, 24,000 crores --to 23,0 00 crores, 24,000 crores.

The next question is from the line of Vedant Sarda from Nirmal Bang Securities.

Can you please give the aluminium realization for Q4 FY '26 and the current realizations?

Realization of? You are talking about alumina or metal?

Aluminium, metal. Metal.

Aluminium average realization, which currently which we are get ting is around Rs.3,600 LME hovering. But now just because of war situa tion and all that, it has increased. But what we are expecting should be somewhere around Rs.3,000 or Rs.3,100 for the average throughout the year.

And Q4 realization, FY '26 Q4?

Q4, it was around $2,767 Q4 average '25-'26, $2,767.

You're expecting aluminium prices to come below Rs.3,000 going forward in the financial year 2027? So the average would be Rs.3,000, like it is currently hovering around Rs.3,500, Rs.3,600.

Of course, this Rs.3,500, Rs.3,600 is a very escalated thing du e to war situation because already some of the smelters are closed down, the capacities are reduced. Once the smelter comes to the capacity, everything i s normalized. So that demand supply gap will further reduce. And at that time, the LME may go down.

Before this smelter disruption before this war, aluminium was h overing around Rs.3,200 to Rs.3,300. So that's [Inaudible]

That is optimistic which we are thinking it can go down to mayb e Rs.3,000 also, but somewhere around Rs.3,000 to Rs.3,100.

The next question is from the line of Arjun from Chasing Lakshmi Investment.

Congrats on the robust quarter. My question is three parts. The first is [Inaudible]

I'm sorry to interrupt you, Mr. Arjun. We are unable to hear yo u clearly. There is a lot of disturbance from your line. As there is no response we'l l move to the next question, which is from the line of Darshan Mehta from Dolat Capital. We'll move to the next question, which is from the line of Saket Kapoor from Kapoor & Company.

Sir, firstly, if you could please explain the key reason in ter ms of our profitability taking a dip for the alumina segment year-on-year? And if you c ould give us some colour on what are the current price trends with respect to alumina?

You see, as far as alumina is concerned, profitability, I told earlier also, this year in alumina segment, our volumes has increased. Our volume has increased by around 3.4 lakh tons extra sales we have done compared to '24- '25. '24-'25, our production was 20.75 lakh tons. This year, we have done around 23 lakh tons. So this has given an advantage of around R s.1,714 crores. Of course, the prices have gone down. The prices has gone down from Rs.595 average in '24- '25 to Rs.376 average in '25-'26, which has res ulted into negative impact of around Rs.2,659 crores. Overall, if you see the adverse impact is on alumina segment as compared to '24-'25 is around Rs.784 crores. So that is there because of reduction in the prices. But we have also improved in the efficiencies like caustic soda consumption and all that. That has given some advantage of around Rs.100 crores to Rs.150 crores. So -- coming to this year, if you see this financial year, our volumes will be -- from existing refinery will be almost similar kind of volume because we have reached to the peak of around 23 lakh tons. 5th Stream which is additional refinery is coming, 2 lakh furth er will be added. So similar kind of figures because prices will further g o down. The prices of alumina, which is average was Rs.376 last year, that is '25-'26, will go down to around maybe Rs.310 or Rs.320. So that will be havin g another financial impact of maybe around Rs.1,000 crores or Rs.1,200 crores.

Okay. And sir, how are we positioning in this $310 mark? Have w e contracted for the entire year in terms of that? Or are the current spot price s are hovering in those levels? What have we [Inaudible] how have we [Inaudible]

Current spot prices are at the level of $310, $320, sometime we are getting $330 also. But the kind of situation, which is there, there is an excess of alumina in the market. There is an excess of alumina from Indon esia. The requirement has gone down. That's why we are expecting the pric es may not go up. We'll be hovering somewhere around $310 to $320.

Okay. Sir, earlier there was a formula on the basis of the LME prices, say, 12% to 13%, correct me there of the [Inaudible] what the LME prices for aluminium that was the price trend for alumina. So has that trend taken some hit b ack because of the availability of alumina? Or what should be factor [Inaudible]

Because of availability only. Because earlier we have got in long term around 15%, 16%, 17% also of the LME. But now when we are going for long-term agreement or last long-term agreement, we got around [Inaudible ] 11% to 11.5% only. And the main reason is the excess of alumina in the market.

Okay. And sir, then for the metal part of aluminium, what are w e pencilling in, in terms of the current year, means the profitability shift has taken [Inaudible] there is a significant profitability shift when you look at the segment results towards the higher aluminium prices. So what should investors pencilling in, in terms of the profitability from the aluminium segment with the type of price trend that we currently have and also the incremental volume of the metal that we can produce and sell for the coming year?

As far as the volumes are concerned, volumes metal also, we have reached to the peak because our capacity is 4.6 lakhs. Last year, we have done around 4.71 lakh tons of cast metal. And this year, we are targeting s lightly more. That is maybe Rs.2,000, Rs.3,000 more, what we have already pea ked out. Volumes will be almost similar kind of volumes. LME as of now is on the higher side, that is 3,600 or maybe 3,550 it is there. But once the situation normalize, the smelters again start producing. The LME will come down surely because now the supply is also not there from the M i d d l e E a s t t o t h e o t h e r p a r t s o f E u r o p e a n w h e r e f r o m M i d d l e E ast was going. That's why also they have reduced the production. So LME will reduce to around maybe what. It's very difficult to predict, but what we are thinking is somewhere around Rs.3,000 to Rs.3,100.

This quarter, first quarter like this month, our average realiz ation is somewhere around Rs.3,600 to Rs.3,550, Rs.3,600 we are getting this month, that is April. And May also, we are expecting the first quarter will be good. First quarter, we will be averaging around maybe Rs.3,500.

Okay. So there will be a signi ficant contribution from -- on th e higher realization from the aluminium segment, whereas for the alumina part, we wi ll be in the same vicinity of $310 to $315?

Right, right.

And that was [Inaudible] yes, sir.

If the metal price [Inaudible] if you see our metal average metal price for the last year, '25-'26, our profitability based on the average meta l price is Rs.2,674, the whole year average. If CMD sir is telling that if our aluminium price varies from $3,000 to $3,100 for this fiscal '26-'27, so we'll be getting $400 more. So that is the comfort zone we are expecting though there is some reduction in the alumina prices, but we'll be getting that comfort in the metal price. If the whole year metal average price varies is in the range of $3,000 to $3,100.

Okay, sir. And sir, so just to model it out, the quarter 4 numb ers give us a base in terms of what we can expect taking into account the current evo lving situation. So we should be setting this pace of, say, Rs.2,300 PBT number tha t should not be trending lower if the cost component does not go higher. This understanding is correct on a [Inaudible]?

That is correct, almost that is correct. If you produce that mu ch of volume, then we are expecting that profit of more than Rs.2,000 crores plus first quarter. Because price is in our favor.

And on the volume front also, sir, we have said that we have already reached the peak in terms of both the alumina and the aluminium of whatever production or dispatches we can do. So going ahead, we are not getting -- we are not goi n g t o s e e a n y incremental volume for the coming financial year, advantage of any incremental volume?

This financial year, whatever incremental will be coming from the additional fifth stream refinery. So from th e existing refinery, almost si milar kind of volumes will be there.

Okay. And the new stream would be commensurating in which quarter?

We are starting [Inaudible] the commissioning process will be s tarting in June, and the commissioning process itself take around 3 to 4 m onths. So maybe in the last quarter only, we will be able to have the pro duction from there. That's why we have targeted only 2 lakh tons from the new refinery.

Okay. And for the next year as a whole, sir, what would be [Ina udible] it will be ramped up to how much?

Next year, out capacity is 1 million tons, that is 10 lakh tons . So next year onwards, it will be doing 1 million ton.

Okay. And in terms of selling of the product, it would be totally [Inaudible] it will be catered to domestically or what percentage will go towards as a n export? How will we arrange the selling?

Like this year out of total sales, whatever sales we have targe ted this year, around 2 lakh, I think 250,000 we targeted for domestic [Inaudi ble] that we have targeted for domestic, and export will be around I think 1 3 lakh or 14 lakh will be export. So domestic will be around somewhere aroun d 10% to 15% of the export.

Okay. Majority will be towards the export only as has been for the current quarter. Okay. And lastly, sir, towards the caustic soda part and how is our GNAL, the JV, which we have with Gujarat Alkalies, how are they in the perfor mance from the same? And what should we anticipate going ahead from the same?

You see GNAL JV in the last financial year, that is [Inaudible] '24-'25, it has given a negative impact of around how much?

Their total loss is Rs.38 crores.

This year, only Rs.38 crores. But last year it was?

Last year they have reduced the loss from Rs.135 crores to Rs.3 8 crores because '24-'25, they have incurred a loss of Rs.135 crores, bu t they have brought down to Rs.38 crores this year. And most importantly, t he last quarter, they have made a profit of Rs.11 crores. That is a very positive point for [Inaudible].

We expect that this year, again, they will turn to profit and the negative impact which they are having, which will further reduce.

We'll be getting some money from them.

For JV, you see whatever prices, we do [Inaudible] the rest of the quantity we [Inaudible] 50% of the quantity we take from the market. So whatever pricing we are [Inaudible] cost we are g etting from the market, that is applicable to JV. They have to give us at the same price. There is no price concession.

Yes, sir, there is no price concession. That was what I'm askin g how has the price trend been for the caustic soda for the quarter ending March '26?

Price trend is like last year '25-'26, it was Rs.42,177 per ton average. The quarter 1 '26, '27, what we are seeing is it will be around Rs.45,000. There is an increase of around Rs.3,000.

Okay. From last year averages, it will be higher by Rs.3,000 for the first quarter, June quarter?

Quarter 1, quarter 2 because we have ordered for six months. Th e first 6 months will be around Rs.3,000 more.

Okay, sir. And lastly, sir, on the CWIP, the closing balance wa s Rs.6,300 crore. So what portion will get capitalized for this year? And what kind of [Inaudible] what are the facilities, sir, I think?

I think [Inaudible] 100% will be capitalized this year because the majority is towards the fifth stream expansion. It is around Rs.5,500 crore s. So if we capitalize from June onwards. I think this year, the whole WIs will be converted to assets.

And all the backward integration part for the coal availability [Inaudible] on the coal mining part, sir, how much [Inaudible] what is the current update on the same? How much of the coal are we mining ourselves and through the MDO ro ute and [Inaudible]?

See, the coal requirement is around 7.2 million ton. Out of tha t, our own production will be around 4.8 million ton. And rest will be taking mostly from our linkage route from Coal India and around 5% to 10% will go for E- Auction.

The next question is from the line of Ashish Kejriwal from Nuva ma Wealth Management. Please go ahead.

Thanks for the opportunity, sir. Sorry I got disconnected that time. So sir, I think you mentioned that E-Auction coal prices, we have not seen any majo r increase in last 2 months. That's right?

Okay. Sir, secondly, the way you mentioned about caustic soda price, is it possible to share your different raw material prices like CP Coke, CT Pitch and aluminium chloride, what it was in FY26?

See caustic soda prices average '25-'26 was 42,000. It has gone to 45,000. CP Coke '25-'26, it was 53,000. This year, Q1 and Q2, it will be s omewhere around 57,000. Aluminium chloride, 1,21,000, it has gone to 1,3 0,000. HFO has further increased -- HFO and MDO that is the substantial increase which we are seeing. LDO is less and HFO is more from 46,000 to 70,00 0. So this kind of increase we are seeing in caustic soda, CP Coke, aluminium chloride and HFO.

And sir, what about CT Pitch?

CT Pitch is almost same. CT Pitch it has gone up from 44,000 to 56,000. The CT Pitch has gone up from 53,000 to 57,000 sorry [Inaudible] CP Coke has [Inaudible] CT Pitch from 53,000 to 57,000 around 4,500 increase CT Pitch. And CP Coke from 44,000 to 56,000, which may be around maybe 11 ,000, 12,000 increase.

So sir, if I'm looking at from FY26 average versus first quarter, we are seeing increase in all other raw material prices. I think that has only been so m e w h a t o f f s e t b y [Inaudible] I don't know from where it is being offset. So your cost of production definitely should increase from what we are talking about 150, 155. Isn't it so?

Yes, yes cost of production will increase [Inaudible] will increase.

When we are talking about Rs.155 to Rs.160, that was for Q4 or FY26?

Average cost is around Rs.155. It is around Rs.156 for the whole year. If you see the Q4, it is around Rs.1,00,057, Rs.1,00,058. So we are bo oking at a highest rate of Rs.160. In any case, it will not go beyond Rs.160.

Understood, understood. And sir, lastly, what could be our power cost per unit?

Power cost per unit is around 3.15.

This is at EBITDA level you are talking about?

EBITDA level, it is coming around [Inaudible] if you see the ex penditure, it is coming around power cost is 31% of the total cost. Total cos t. If it is the revenue, it is coming around [Inaudible]

Sir, actually, I was trying to ask [Inaudible] What would be our [Inaudible]

Okay. So I was looking at, what could be our power cost per ton of aluminium. So when we are talking about 155,000 to 160,000 per ton of aluminium production, what could be our power cost in that?

It is coming around [Inaudible]

Around 31%.

55,000 to 60,000.

Okay, okay. Okay, sir. Thank you so much. That’s helpful.

Thank you.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Bharat Kumar Sahu for closing comments.

Thank you, ma'am. On behalf of NALCO, I thank all participants who took out their valuable time and share their views and took interest in NALCO's growth journey. We thank you team Chorus for facilitating this earnings call for Q4 and FY26. And we are also thankful to Systematix Group f or hosting the earning call. We look forward for similar kind of cooperati on on a continued basis. Thank you. Thank you all.

Thank you. On behalf NALCO…. yes, sir please go ahead.

Okay. Thank you. Okay. You go ahead.

Thank you, sir. On behalf of NALCO Limited, that concludes thi s conference. Thank you for joining us, and you may now disconnect your lines. ****