NALCO Q2 FY27 Earnings Call: Best-Ever Quarter Since Inception, Refinery Start-Up Targeted December (NATIONALUM)

National Aluminium Company Ltd held its Q2 FY27 earnings call on November 02, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Best-Ever Quarter Since Inception Across All Headline Lines

• Best-ever quarterly results since inception — NALCO reported record Q2 FY 2026-2027 across revenue, PBT, PAT and EBITDA; results were taken on record by the board and published the prior evening.
• H1 FY 2026-2027 revenue of Rs.11,143 crore — an all-time high, with EBITDA also at an all-time high of Rs.5,539 crore.
• H1 FY 2026-2027 PBT of Rs.5,160 crore and PAT of Rs.3,837 crore — both highest-ever; H1 net profit was up 54% YoY versus H1 FY 2025-2026.
• Q2 FY 2026-2027 net profit up 28% YoY — versus Rs.1,835 crore in Q2 FY 2025-2026.
• Other income up ~43% QoQ in Q2 FY 2026-2027 — driven by higher interest income as the fund base grew from Rs.8,500 crore to ~Rs.12,000 crore, better rates from additional empanelled banks, and ~Rs.10 crore of additional income booked in H1 FY 2026-2027.

October Disruption Reversing; Pricing Capped Near-Term

• Only 1 vessel dispatched in October 2026 (Q3 FY 2026-2027) — dispatches were badly hit by restrictions; ~6 vessels of spot tender orders are in hand for November 2026, with 2 already loaded and payments received for 3 vessels, versus just 1 vessel in October.
• ~4 vessels/month (~1,20,000 tons) run-rate expected from November 2026 — management expects supplies to resume at that pace, while cautioning that no one can give the exact picture given the prevailing restrictions.
• Export alumina pricing guided at $370-380/ton near term (Q3 FY 2026-2027) — management does not expect higher, citing excess aluminum in the market from restricted smelters now restarting; prices may reach ~$400/ton only if smelters ramp up fast, entirely dependent on the geopolitical situation.
• Domestic pricing now export-linked — NALCO runs 4 export spot tenders monthly and sets domestic prices on the prior month's average tender realizations plus additions such as import duty (November 2026 pricing based on October tenders; illustrative realizations of $400, $370, $380/ton cited by Director Finance Abhay Kumar Behuria).
• 2-3 year alumina tie-up tender floated — targeting smelters in the Middle East and other locations, which typically fetch better prices; this addresses ~2 million tons of expected surplus until the brownfield expansion reaches final ramp-up around FY31-32 (as stated by management).
• ~1.6 million tons of excess alumina projected in the market in FY 2026-2027 — creating price pressure; management does not expect FY 2027-2028 export prices above $350/ton, though Indonesian smelter capacity (~0.5-0.6 million tons, FY 2027-2028 or FY 2028-2029) and Middle East smelters stabilizing will keep demand supported.
• Alumina at ~12.5% of LME as base case — management expects 12.5-13% of LME (period unspecified), implying ~$370/tonne at $3,000/tonne LME, and does not expect a return to 15-16% of LME.

Input Costs Up ~15% YoY; Rs.300-350 Cr H2 Recovery Targeted

• ~15% overall input price increase vs FY 2025-2026 — caustic soda rose from ~Rs.42,000 (FY 2025-2026 average) to Rs.46,900 in H1 FY 2026-2027 and ~Rs.49,000 projected for Q3 FY 2026-2027; CPC rose from Rs.44,600 to Rs.63,700 to Rs.70,600; LDO from Rs.60,000 to Rs.84,000 to Rs.1,15,000 over the same progression.
• H2 FY 2026-2027 margin bridge of ~Rs.300-350 crore — Rs.150 crore from the new refinery adding ~2 lakh tons of extra alumina, Rs.100 crore from techno-economic benefits not captured in H1, and Rs.50 crore from non-repeat of the additional royalty impact (error claimed by the Government of Odisha) booked in H1 FY 2026-2027.
• H2 FY 2026-2027 alumina cost guided broadly flat — the Rs.2,000 caustic increase adds Rs.500-600/ton, to be offset via lower specific caustic consumption in the dry season, after ~4 months of H1 rains hurt recovery from the Redmond pond; management targets a Rs.500-1,000 reduction in alumina cost via techno-economic improvements.
• Power & fuel cost up ~Rs.317 crore in H1 FY 2026-2027 vs H1 FY 2025-2026 — of which Rs.256 crore was extra fuel oil at the refinery after Railways restricted rakes to NALCO's captive power plants amid a nationwide coal shortage; captive coal stock fell from a normal ~15 days to 1-2 days (now improved to 4-5 days); management is confident the ~Rs.317 crore will be recovered in H2 FY 2026-2027.
• Grid power purchase rose to ~Rs.123 crore in H1 FY 2026-2027 — from Rs.50 crore in H1 FY 2025-2026, on CPP boiler breakdowns and moist coal; expected to improve in H2 FY 2026-2027.
• Structural cost outlook: input costs projected to rise 2-3% per year over the next 3-4 years — until the new smelter is commissioned; the new refinery's modern technology is expected to offset added depreciation (no interest) with techno-economic gains, keeping costs roughly flat.
• Pay revision expected from FY 2027-2028 onwards at ~15% average increase — employee cost is 10-12% of total cost, implying a 3-4% cost increase; for FY 2026-2027 the impact hits only Q4 (January-March).

Refinery Start-Up Near; Angul Smelter Expansion Mapped to 2031

• Refinery expansion ~30-35 of ~50 packages complete — 3-4 critical-path packages at 90-92% physical completion; integrated trial and production targeted for the last week of December 2026 or early January 2027 (Q4 FY 2026-2027), with 3-5 months to reach 100% of rated capacity.
• FY 2027-2028 refinery production guided at 0.75-0.8 million tonnes — versus the 1 million tonne full-capacity level; FY 2026-2027 alumina production guided at 2.45 million tons (vs 2.5 million tons earlier), with the new refinery's first train targeted to add up to 0.2 million tons, though the full contribution may not materialize in FY 2026-2027.
• Angul smelter brownfield expansion: ~Rs.17,000-18,000 crore investment — Technology Licence Agreement with EGA (Dubai) signed ~2 months before the call; DPR expected complete January-February 2027 and board approval targeted February 2027; mechanical completion targeted December 2030 and commissioning Q1 2031 — the target given to the Ministry of Mines, with execution running only 1-3 months behind those timelines.
• Capex phasing: only ~Rs.200-300 crore before FY 2028-2029 — then ~Rs.5,000-6,000 crore around FY 2027-2028/FY 2028-2029 and ~Rs.7,000-8,000 crore in each of FY 2028-2029, FY 2029-2030 and FY 2030-2031; combined smelter + power plant capex ~Rs.25,000 crore across FY 2027-2028 to FY 2030-2031.
• 50:50 JV with Neyveli Lignite Corporation approved — DPR ready, board approval expected within 2-3 months (FY 2026-2027); NLC's coal mines to supply coal at NLC's production cost with no premium, which management expects to provide fuel security and lower power cost.
• Potangi mines start hoped within 2-3 months (~Q4 FY 2026-2027) — MDO Dilip Buildcon appointed; the bottleneck is tree-clearing for the NH-to-mines road, facing resistance from local activists, with the ministry and state government negotiating at the highest level.
• Utkal coal: FY 2026-2027 plan of 4.8 million tonnes on pace — vs ~4 million tonnes produced in FY 2025-2026; H1 FY 2026-2027 production was 21.48 lakh tonnes (~2.1 million tons); environmental clearance for 4.8 million tonnes expected within 2-3 months (~Q4 FY 2026-2027).

Bauxite Security to ~FY 2041-2042; Coal Fully FSA-Covered

• ~250 million tonnes of bauxite reserves, ~15 years of mine life (through ~FY 2041-2042) — ~150 million tonnes across South Block 1 + South Block 2 + Central block, plus ~111 million tonnes at Potangi; North block and South Block 1 are nearly mined out.
• Panchpatmali leases run to 2029 (Central and North blocks) and 2031 (South Block) — per the CMD, renewal is automatic for government companies/PSUs with no bidding; a consultant is being appointed for due diligence; the CMD cited a legal provision in the MMDR framework under which "a government company's captive mine cannot be taken out and put to bidding," though additional royalty may be imposed.
• Potangi ore to carry a Rs.400-500/tonne road-transport premium initially — vs Panchpatmali bauxite cost of Rs.1,300-1,400/tonne, falling to ~Rs.100-150/tonne once the Rs.1,000 crore long-distance conveyor (~18 km per the CMD) is commissioned in ~2-2.5 years (≈FY 2028-29 to FY 2029-30); MDO (PAT) will supply ore at Rs.426/tonne vs Rs.500+/tonne at existing mines.
• Conveyor land: 80-100 of 132 acres of private village land still to acquire — forest department land handed over; the public hearing scheduled for 27 November 2026 (Q3 FY 2026-2027) was deferred; land acquisition expected to take 6-8 months (by ~Q1-Q2 FY 2027-2028).
• Smelter fully covered by FSA of 6 million tonnes — per the CMD, NALCO is not even lifting the full FSA quantity (the analyst cited ~7.2 million tonne smelter requirement); e-auction used only in small quantities for blending; Utkal production rising toward 4-4.8 million tonnes (period unspecified).
• E-auction coal offtake fell from 5.16 lakh tonnes in FY 2025-26 to 1.96 lakh tonnes in H1 FY 2026-27 — against e-auction market premiums of ~200-250% (cited by the analyst); a consultant has been appointed to improve FSA availability, with low H1 availability expected to improve in H2 FY 2026-2027 per management.

Margins Expected to Hold Until New Smelter; Cash to Rs.12,000 Cr

• H2 FY 2026-2027 alumina realization guided at ~Rs.35,000 — vs H1 average of Rs.33,200 (a Rs.2,000 improvement); in dollar terms management expects ~$370-400/ton vs ~$370 average achieved in Q2 FY 2026-2027, with spot buyers currently quoting lower due to higher insurance and shipment charges from Middle East shipping blockages.
• Margin outlook: NALCO expected to maintain the same margin level until the new smelter is commissioned — premised on alumina and aluminum prices rising over the next 3-4 years.
• FY 2026-2027 business plan assumed LME at 2,900-3,000 — management is confident LME will remain around 3,000, noting LME declined in Q2 FY 2026-2027 vs Q1 FY 2026-2027; ~95% of aluminum customers are domestic under annual MOUs, with metal pricing fully LME-linked and revised every 3 days.
• FY 2026-2027 capex plan of ~Rs.1,800 crores, expected to be crossed — ~Rs.800 crores incurred in H1 FY 2026-2027; H2 includes the EGA license payment; management expects a cash balance of Rs.12,000 crores at the end of FY 2026-2027.
• No commodity hedging per NALCO policy — with LME-linked pricing and no financial commitments (capex, IPO), hedging is not required at this point; the company will evaluate hedging only after commissioning of the fifth stream refinery.
• FY 2026-2027 employee cost expected slightly below FY 2025-2026 — average employee cost was ~Rs.36 lakh in FY 2025-2026 vs ~Rs.34 lakh in H1 FY 2026-2027; a net reduction of 80 employees with higher-wage retirees replaced by fresh hires at the lowest scale offsets the pay revision and DA increments.
• Alumina transferred to the smelter at cost price — not cost-plus or market price, per NALCO's accounting policy.