NALCO reports 76% profit surge in Q1FY'25 driven by lower costs, higher aluminium prices

India's National Aluminium Company (NALCO) reported a remarkable 76% increase in profit for the first quarter, driven by reduced costs and higher aluminium prices. The state-owned enterprise posted a consolidated profit of INR 5.88 billion (approximately $70 million) for the three months ending 30 June.

During this period, global base metal prices, including aluminium, surged due to supply concerns and rising demand. Higher commodity prices generally boost the selling price of metals, thereby increasing profit margins for mining companies.

NALCO benefited from a significant 35% decrease in costs for key raw materials like thermal coal and bauxite, resulting in an overall 24% reduction in expenses. However, the company experienced a 10% decline in operational revenue, which fell to INR 28.56 billion, primarily due to a 27% drop in its chemicals business, the second-largest segment.

While aluminium continues to be the company's primary revenue source, accounting for nearly 90% of total revenue, its growth was modest at just 4% during the quarter. Looking ahead, experts anticipate steady growth in domestic aluminium demand, driven by strong requirements from the electrical, building, and construction sectors, alongside a recovery in consumer durables.