National Aluminium Company Ltd (NATIONALUM) Q1 FY27 Earnings Call: Plans Rs. 24,000 Cr Capex, Alumina Price Guidance $370/tonne

National Aluminium Company Ltd held its Q1 FY27 earnings call on July 31, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Revenue and Profitability

• Total income of Rs.5,400 Cr in Q1 FY 2026-2027, up 39% YoY from Rs.3,930 Cr in Q1 FY 2025-2026; PBT grew 88% and EBITDA grew 78% YoY.
• Best-ever Q1 production levels achieved for bauxite, hydrate, wind power, and power generation in Q1 FY 2026-2027.
• All-time records for both revenue and profitability set in Q1 FY 2026-2027.
• Management targets 5-10% production above rated capacity in FY 2026-2027 through volume growth and cost reduction.
• Q1 FY 2026-2027 capex spend was Rs.350 Cr, with the fifth stream refinery and smelter expansion underway.

Supply Deficit Supports Prices; Premium Surges

• LME aluminium expected in $3,100-3,200 range for the remainder of FY 2026-2027; CRU and Platts forecasts indicate "a 0.88 million tonne deficit in the international aluminium market" for FY 2026-2027.
• Alumina spot realizations averaged ~$323/ton in Q1 FY 2026-2027; Q2 FY 2026-2027 guidance is ~$370/ton based on July/August spot tenders of $370-$380/ton, implying sequential improvement of ~$47/ton.
• Domestic aluminium premium surged to ~$110/tonne in the latest export tender (up from ~$60/tonne five to six months prior); management expects premium to decline as "war risks ease and Middle East smelters ramp up production."
• 60-70% of alumina exports directed to the Middle East; management expects long-term alumina pricing to settle at 11-12% of LME (*vs historical 14-15%*).
• Smelters idled due to "metal leaks war" are expected to restart only by Q4 FY 2026-2027, extending supply tightness.
• Management has no plans to enter aluminium recycling, citing quality degradation risks for primary metal produced by a major smelter.

Sharp Raw-Material Inflation Pressures Margins

• Raw material costs rose sharply in Q1 FY 2026-2027: caustic soda from Rs.42,000/t (FY 2025-2026 avg) to Rs.45,000/t, expected Rs.49,000/t in Q2; CP coke from Rs.44,000/t to Rs.66,000-70,000/t; HFO from Rs.46,000/t to Rs.75,000/t.
• Metal production cost increased Rs.15,000-16,000/tonne in Q1 FY 2026-2027, with an extra Rs.230 Cr cost burden; Q2 FY 2026-2027 average aluminium cost guided slightly higher to Rs.1,71,000-1,72,000 per tonne.
• Alumina cost of production stood at Rs.22,766/tonne in Q1 FY 2026-2027, up from ~Rs.20,000/tonne in FY 2025-2026, driven by higher caustic soda and HFO costs.
• Employee cost for Q1 FY 2026-2027 came in at Rs.395 Cr; management expects full-year FY 2026-2027 figure near Rs.1,600 Cr. Q4 FY 2026-2027 employee cost may see an additional ~15% increase due to pay revision due from January 1, 2027.
• Coal inventory at refineries is low (~2-3 days vs target 10-15 days) due to government priority on power plant rakes; management expects improvement as summer restrictions ease.
• Management expects sustained alumina prices at $370/ton could offset raw material cost inflation and protect margins.

Fifth Stream On Track; Smelter Expansion Clears Path

• Fifth stream alumina refinery (1 MT) mechanical completion targeted by September 2026 (end of Q2 FY 2026-2027), with production start from November/December 2026; FY 2026-2027 production target of ~2 lakh tons.
• Full rated capacity of 3.1 MTPA (targeting 3.2-3.3 MTPA) expected from FY 2027-2028; current capacity is 2.1 MTPA with actual FY 2025-2026 production of 2.3 MTPA.
• Smelter expansion of 0.5 MTPA with 1,000 MW power plant; management guided "total capex plan up to FY 2030-2031 amounts to Rs.24,000 crore," comprising Rs.17,000-18,000 Cr for smelter and Rs.6,000 Cr as NALCO's contribution to the power plant JV.
• Technology license agreement with EGA to be signed in August FY 2026-2027; DPR in 3-4 months, board approval by October-November FY 2026-2027. Only technology license fee of ~Rs.300-400 Cr expected in FY 2026-2027.
• New refinery caustic soda consumption expected to reduce from 103-105 kg/tonne to 85-90 kg/tonne, potentially lowering costs by Rs.1,000-Rs.1,500 per tonne; the new stream uses pressure digestion technology.
• Smelter and power plant commissioning targeted by "December 2030," with major capex peak from FY 2028-2029 to FY 2030-2031.
• Capex guidance: FY 2026-2027 target of Rs.1,500-1,800 Cr; FY 2027-2028 planned Rs.2,500 Cr; peaking at Rs.6,000-7,000 Cr for smelter and power plant expansion.

Strong Cash Generation Funds Expansion

• Net cash (zero debt) position of Rs.10,500+ Cr as of end of Q1 FY 2026-2027; management projects FY 2026-2027 PAT of Rs.6,000+ Cr.
• After dividend payout and normal capex of ~Rs.1,500 Cr/year, the company expects to add Rs.3,500+ Cr in cash annually.
• New alumina refinery capex of ~Rs.5,600 Cr funded entirely through internal accruals, with no interest cost (only depreciation charged).
• Power plant JV (with NLC, 50:50) will build 1,080 MW at Rs.12,000 Cr total cost, using 30:70 debt-equity ratio; NALCO's equity share is ~Rs.3,500 Cr.
• Captive coal mines produced 11.04 lakh tonnes in Q1 FY 2026-2027; full-year target of 4.8 MT for FY 2026-2027 (up from 4 MT in FY 2025-2026). Captive coal landed cost of Rs.1,600/tonne saves ~Rs.1,500/tonne vs e-auction.
• Alumina sales guided at 1.6 MT for FY 2026-2027 (vs 1.4 MT in FY 2025-2026); aluminium production guidance of 4.76-4.77 lakh tonnes for FY 2026-2027 from ~959 operating pots.
• Employee count at 4,848 as of Q1 FY 2026-2027 end; management plans annual reduction of 170-200 employees per year for the next 3-4 years.