National Aluminium Company (Nalco) is expected to report a whopping 62 percent growth in profit at Rs 290 crore for July-September quarter led by company's strategy to minimise expensive coal imports. Profit in the year-ago period was Rs 179.2 crore.
Revenue is seen going up by 7 percent to Rs 1,868 crore in the second quarter of current financial year 2014-15 from Rs 1,738 crore in corresponding quarter of last fiscal aided by higher aluminum/alumina realisation and slightly higher aluminum volumes, according to the average of estimates of analysts polled by CNBC-TV18.
Operating profit may spike 42 percent on yearly basis to Rs 380 crore and margin may expand 490 basis points to 20.3 percent during the quarter on higher realisation.
Factors
Nalco had made a strategic decision to reduce exposure towards aluminium and focus on alumina. Now the company restricted aluminium production to the extent of domestic coal availability and kept power cost under check.
The company may be benefited from strong aluminum demand growth globally. Alumina has started to inch upward on strength in aluminum market.
Nalco derives around 50 percent of its revenue through alumina sales.
Key issues to watch out for are availability of coal for captive power plant and capacity utilisation of smelter.
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