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The market expects much less from NALCO than it has delivered before.
At today’s share price, buyers are assuming NALCO grows about 0% a year, forever. Over the last ten years it actually grew about 7% a year. That is a big step down from its own record — in other words, that it stops growing altogether. Either the market can see a problem that the published accounts do not show yet, or it is expecting a slowdown that has not happened.
- How it is valued: Discounted cash flow.
- What the price assumes: 0% growth, against 7% the model takes from its own record.
- Ten-year record: Between FY2018 and FY2026, NALCO's revenue went from ₹9,618 crore to ₹17,843 crore — it compounded at about 8% a year over 8 years.
- Biggest swing factor: Alumina prices. Main risk: Price falls.
01A state-owned aluminium producer in Odisha
National Aluminium Company (NALCO), majority-owned by the Government of India, mines bauxite and refines alumina at Damanjodi in Odisha and smelts aluminium at Angul, with its own captive power plant.
It exports a large share of its alumina, so global alumina prices matter as much as aluminium prices. It is expanding its refinery and planning more smelting capacity.
02What the market is assuming
Work backwards from today's share price and you can see what buyers are quietly taking for granted. Here is the growth that price implies for NALCO, next to what the model assumes from the company's own record.
The further apart these two numbers are, the bigger the bet a buyer at today's price is making.
03NALCO's record, in plain numbers
Between FY2018 and FY2026, NALCO's revenue went from ₹9,618 crore to ₹17,843 crore — it compounded at about 8% a year over 8 years. Net profit grew from ₹1,342 crore to ₹5,797 crore, about 20% a year — faster than revenue, so margins widened. In FY2026 it kept 32.5% of revenue as net profit — its best year in the period. The latest year added 6.3% to revenue, close to its own long-run pace.
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
Revenue and net profit by year (₹ crore)
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2018 | 9,618 | 1,342 | 14.0% |
| FY2019 | 11,499 | 1,734 | 15.1% |
| FY2020 | 8,472 | 136 | 1.6% |
| FY2021 | 8,956 | 1,299 | 14.5% |
| FY2022 | 14,181 | 2,951 | 20.8% |
| FY2023 | 14,255 | 1,435 | 10.1% |
| FY2024 | 13,149 | 1,988 | 15.1% |
| FY2025 | 16,788 | 5,268 | 31.4% |
| FY2026 | 17,843 | 5,797 | 32.5% |
04How NALCO gets valued — and why
Discounted cash flowThis business is valued on the cash it is expected to generate, discounted back at its cost of capital — with growth taken from its own ten-year record rather than from guidance.
05What decides NALCO's value
Alumina prices
Export alumina prices swing profit.
Aluminium prices
LME prices drive smelting margins.
Low costs
Captive bauxite and power keep costs down.
Expansion
New refinery and smelter capacity.
06What could go wrong
- Price falls. Lower alumina or aluminium prices cut profit.
- Coal costs. Power costs depend on coal.
- Project delays. Expansions can slip.
07What the full NALCO valuation shows
Sign in free to see the complete NALCO valuation
- ✓Fair value per share — from a ten-year discounted cash flow, every step shown
- ✓The Workbench — change revenue growth, the discount rate or terminal growth and watch NALCO's value move
- ✓Bull, base and bear cases — and exactly which assumptions move between them
- ✓Peer comparison — against Hindalco, Vedanta and Hindustan Zinc
- ✓Downloadable report — the full write-up, yours to keep
08Questions people ask about NALCO
What does NALCO produce?
Bauxite, alumina and aluminium.
Why did NALCO's profit jump?
Global alumina prices rose sharply.
Who owns NALCO?
The Government of India holds the majority.
Is NALCO overvalued?
At ₹330 the market is pricing in roughly 0% sustained growth, against the ~7% its own record supports. That is less than it has delivered — on these numbers the market is asking the business for less than its own record, which usually means it doubts the record repeats.
What is the intrinsic value of NALCO?
It is computed from the filed financial statements using the method that fits this business (discounted cash flow), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
How much debt does NALCO carry?
Debt to equity stands at 0.00, against 0.00 at the start of the period — the balance sheet is a core input to the cost of capital used here.