Nalco shares slip 6% after weak March quarter performance

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MUMBAI: Shares of National Aluminum Co Ltd (Nalco) fell as much as 5.97% after the company posted 57% decline in consolidated net profit at 100.51 crore for March quarter due to lower income.

At 12:05 pm, National Aluminum was at 31.70, down 5.37% from its previous close, while the benchmark index, Sensex, fell 1.21% to 34744.01.

The state-owned company posted a profit of 234.82 crore in January-March 2019, Nalco said in a filing to BSE. Income during the March quarter dropped 28.69% to 2,042.27 crore from 2,863.89 crore in the year-ago period.

“We are optimistic that in the long run with our focus on increasing the production in mining and refining segments, opening up of the new coal blocks, backward integration in supply of key raw materials like caustic soda, we shall be able to tide over the present economic crisis,” Nalco CMD Sridhar Patra said.

Analysts at Emkay Global Financial said, “National Aluminum has been operating at near capacity for past several years, with expansion projects continuously delayed and see no volume growth for next 2-3 years at least. Any increase in aluminum production at current price will add to further losses due to high fixed costs in the aluminum division. With a bearish near-term outlook on alumina, based on 4 times FY2022 EV/EBITDA”. The brokerage has a sell rating on the stock.

Nalco said the outbreak of pandemic globally and in India has impacted business and economic activities in general.

“During the year, the company achieved a net turnover of 8,426 crore, which has been adversely impacted by about 2,900 crore due to fall in global metal prices,” it said.

Nalco is one of the largest integrated bauxite-alumina-aluminum-power complex in the country, having integrated and diversified operations in mining, metal and power.

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