India’s Navratna firm NALCO posts a 40% fall in profit for Q1 FY2024, holding limped LME prices responsible

National Aluminium Company Limited (NALCO), a Schedule ‘A’ Navratna CPSE, reported last week that its quarterly profit for Q1 FY2023-24 recorded a 40 per cent fall, attributed to sluggish global aluminium prices and mediocre demand. NALCO said that it earned a consolidated profit of INR 3.34 billion ($40.34 million) in the first quarter ended June 30, 2023, compared to INR 5.58 billion during the corresponding period of the last year.

NALCO’s revenue from the aluminium business registered a decline of 18 per cent and that from chemicals division dropped by 2.7 per cent. As per the report, NALCO’s overall revenue posted a fall of 16 per cent year-on-year.

NALCO also highlighted that its revenue from operations dwindled by 16.26 per cent year-on-year from INR 37.95 billion to INR 31.78 billion.

According to market analysts, poor supply-chain and ongoing disparity between China and India’s of HRC-grade aluminium prices resulted in depressed prices, which eventually led to NALCO’s lower revenue and profit.

On the other hand, the LME aluminium benchmark price edged a year-on-year fall of 40 per cent through the June quarter, contributing to NALCO’s shrunken profit.

NALCO expenses in Q1 also dropped by 10 per cent Y-o-Y, thanks to power and fuel cost curb.

Last week, Hindalco Industries Ltd. also published its first quarter report, highlighting a net profit INR 2,454 crore, also down by 40 per cent from INR 4,119 crore. Consolidated EBITDA also decreased over the year by 29.3 per cent from INR 8,640 crore to INR 6,109 crore.