Nalco’s Q1 Just A Blip, Growth Story Intact

Nalco’s Q1 Just A Blip, Growth Story Intact

Nalco’s stocks fell 7 percent in intraday trading on Thursday after the company reported a sharp decline in its quarterly profits, triggering share sell-off.

But this may be a temporary blip in the PSU’s stock market performance as its long-term growth plans remain the on track.

For example, Nalco has recently started producing AA 3105 alloy comprising aluminium, manganese and magnesium at the rolling plant of its smelter division, which is expected to add to the company’s revenue and profits.

“With this product, NALCO will be widening its base in value-added products and also be an active partner in the Make in India movement,” said NALCO CMD Tapan Kumar Chand, had said on July 26.

The new product is likely to boost the downstream units in electrical components and consumption market in the state of Odisha, fetching advantage in the GST regime, he said. The company’s Q1 net profit was down 4.5 percent at Rs 128.9 crore against Rs 135 crore, in the same quarter last year.

Meanwhile, revenue of the company has increased 14 percent at Rs 1911.6 crore versus Rs 1666.1 crore.

The operating profit (EBITDA) was up 16.9 percent at Rs 227.5 crore and EBITDA margin was at 12.62 percent.

The company has achieved remarkable growth in production on all fronts. During the quarter, bauxite production was 18.81 lakh tonnes, registering a 10.4 percent growth, company said in press release.

Alumina hydrate production was 5.26 lakh tonnes, which is 0.4 percent higher.

During the quarter, the company produced 1,00,695 tonnes of aluminium and the net power generated during the quarter was 1,599 million units.

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At 09:45 hrs Nalco was quoting at Rs 66.50, down Rs 3.85, or 5.47 percent on the BSE.

Nalco is a Navratna CPSE under Ministry of Mines. It was established on January 7, 1981 in the public sector, with its registered office at Bhubaneswar.

The company has integrated and diversified operations in mining, metal and power with sales turnover of Rs 7,933 crore in financial year 2016-17. Presently, Government of India holds 65.36% equity in Nalco.

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