Shares of National Aluminium Company Ltd (NALCO) witnessed a sharp rally on Tuesday, January 5, climbing over 4.25% to reach a fresh 52-week high of ₹344.85 on the National Stock Exchange (NSE). This surge was propelled by a powerful rally in global aluminium prices, which breached the significant threshold of $3,000 per tonne on the London Metal Exchange (LME).
What's Fueling the Aluminium Price Rally?
The record-breaking climb in aluminium prices is primarily driven by a tight supply scenario globally. According to a Bloomberg report, smelting capacity limits in China, coupled with production curbs in Europe due to soaring power costs, have significantly tightened inventories. On the demand side, consumption remains robust, underpinned by steady offtake from the construction and renewable energy sectors.
Strong Quarterly Performance and Dividend Declaration
NALCO's stock momentum is further supported by its solid financial performance for the second quarter of the fiscal year 2025-26 (Q2 FY26). The public sector undertaking (PSU) reported a net profit of ₹1,430 crore on November 7, marking a substantial 37% increase compared to the same period last year. This profit surge was aided by firm aluminium prices.
The company's revenue from operations also grew by 7.2% year-on-year to reach ₹4,293 crore. In a move rewarding its shareholders, NALCO's board approved the first interim dividend for FY26 at ₹4 per share, which translates to an 80% payout on the face value of ₹5. This dividend will be paid on the paid-up equity share capital of ₹918.32 crore.
Commenting on the results, Brijendra Pratap Singh, Chairman-cum-Managing Director of NALCO, attributed the strong performance to improved operational efficiency, cost-control measures, and favourable market conditions. He highlighted the rebound in global aluminium prices and steady domestic demand from infrastructure and automotive segments as key growth drivers.
Future Expansion Plans and Brokerage View
Looking ahead, NALCO has ambitious expansion plans. Brokerage firm Axis Securities noted that the timely ramp-up of the company's 5th stream Alumina refinery with a 1 MTPA capacity by FY27 will be crucial. The company has outlined a massive capital expenditure (Capex) plan of ₹30,000 crore for a 0.5 MTPA smelter and a 1,080 MW captive power plant (CPP).
Axis Securities pointed out that the Capex for the refinery expansion has already seen a cost overrun, and expenditure is expected to increase significantly from FY28, making execution the key monitorable. The brokerage added that the company has guided for a capital structure with a 70:30 leverage ratio for this expansion phase.
NALCO's Stellar Share Price Journey
NALCO shares have delivered impressive returns to investors across various time frames, demonstrating resilience amid market volatility. The stock has gained nearly 9.15% in the last five sessions and has rallied an impressive 29% over the past month.
The medium-term and long-term performance is even more remarkable. The PSU stock has ascended 83% in just six months and has proven to be a multibagger, delivering staggering returns of 620% over the last five years, effectively multiplying investor wealth more than four times. It is pertinent to note that the stock had hit a 52-week low of ₹140 on April 7, 2025.
Disclaimer: This story is for informational purposes only. Readers are advised to consult with a certified investment advisor before making any financial decisions.
