NALCO Q2 Results Review - Below Estimates; Cost Pressures To Ease: Systematix

Systematix Research Report

National Aluminium Company Ltd.’s Q2 FY23 revenue at Rs 34.9 billion (down 2.9% YoY and down 7.8% QoQ) was 12% below our estimate; Ebitda at Rs 3.3 billion (down 70.3% YoY and down 61.5% QoQ) too was 9% below our estimate.

Aluminium volume sales (Source: Ministry of Mines) came in at 115.3 thousand tonne (up 1.2% YoY, down 0.6% QoQ) for the quarter.

Power and fuel costs (up 55.7/up 3.1% YoY/QoQ) remained elevated for another quarter likely due to poor availability of linkage coal, high tariffs for purchased power, and record high e-auction coal premiums.

Raw material costs also rose 78.6% YoY but fell 2.5% QoQ. Ebitda/tonne in the alumina segment recovered to $57/tonne, after touching its lowest level in 12 years in the previous quarter.

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