National Aluminum Corporation Company Analysis

 

Industry Profile  :  Mining as primary sector of economics is very important for development. Not for employment but utilization of natural resources. Minerals constitute the back-bone of economic growth of any nation and India has been eminently endowed with this gift of na­ture. There are many evidence that exploitation of minerals like coal, iron-ore, copper, lead-zinc has been going on in the country from time immemorial. The Mining industry in India is a major economic activity which contributes significantly to the economy of India. The GDP contribution of the mining industry varies from 2.2% to 2.5% only but going by the GDP of the total industrial sector it contributes around 10% to 11%. Even mining done on small scale contributes 6% to the entire cost of mineral production. Indian mining industry provides job opportunities to around 700,000 individuals

However, the first recorded history of mining in India dates back to 1774 when an English Company was granted permission by the East India Company for mining coal in Raniganj. M/s John Taylor & Sons Ltd. started gold mining in Kolar Gold Fields in the year 1880. The first oil well was drilled in Digboi in the year 1866 – just seven years after the first ever oil well was drilled anywhere in the world viz. in Pennsylvania state, USA in 1859. Mining activities in the country however remained primitive in nature and modest in scale uptill the beginning of the current century. Thereafter, with progressive industrialisation the demand for and hence the production of various minerals gradually went up. After India became independent, the growth of mining under the impact of successive Five Year Plans has been very fast. There are ambitious plans in coal, metalliferous and oil sectors to in­crease production of minerals during the 8th Five Year Plan and thereafter.

Company Profile  :  National Aluminium Company Limited (NALCO) is a Navratna CPSE under Ministry of Mines. It was established on 7th January, 1981 in the Public Sector, with its registered office at Bhubaneswar. The Company is integrated and diversified operations in mining, metal and power. The Company is low cost producer of metallurgical grade alumina in the World as per Wood McKenzie report.

NALCO is one of the largest integrated Bauxite-Alumina-Aluminium- Power Complex in the Country. The Company has a 68.25 lakh TPA Bauxite Mine &21.00 lakh TPA(normative capacity) Alumina Refinery located at Damanjodi in Koraput dist. of Odisha, and 4.60 lakh TPA Aluminium Smelter & 1200MW Captive Power Plant located at Angul, Odisha. NALCO has bulk shipment facilities at Vizag port for export of Alumina/Aluminium and import of caustic soda and also utilises the facilities at Kolkata and Paradeep ports. The company has registered sales offices in Delhi, Kolkata, Mumbai, Chennai and Bangalore and 11(eleven) stockyards at various locations in the Country to facilitate domestic marketing. The company is working on Greenfield and Brownfield expansion projects which include the ongoing 5th Stream Refinery Project of 1 MTPA capacity in existing Alumina Refinery at Damanjodi (Brownfield), development of Pottangi bauxite mines, Utkal D&E coal mines in Odisha, establishment of 6 lakh TPA greenfield and 5 lakh TPA brownfield Smelters in Odisha. The power for the proposed smelter expansions are envisaged to be supplied from the 2400 MW coal based power project in JV with NTPC.

Shareholding Pattern  :  65.36% held by Govt of India. 1.91% held by Mutual Funds. 24 financial institutions hold 17.15%. Shockingly Hindalco and Bajaj Allianz Life Insurance Company Ltd hold more than 1%, nearly 1.4 – 1.5%. LIC hold 14%. Foreign investors ignored this as 5,6% holding is not large. Remaining is held with public but after the analysis it is visible that the stock is underowned. large number of public investor but more than 2 lakh is not large. even percentage is low.

Financials and ratios  : 

 2010 - 112011 - 122012 - 132013 - 142014 - 152015 - 162016 - 17
Revenue6,409.977,153.737,427.537,338.568,055.457,352.577,951.31
Net Profit1,069.30849.50592.83642.351,321.85731.01668.53
NPM16.68%11.87%7.98%8.75%16.40%9.94%8.40%
EPS4.153.302.302.495.132.842.98
Book value43.3245.4646.3047.0449.6650.0852.80
Dividend per share1.511.251.51.7522.8
Dividend Payout24.1030.3354.3460.1834.1270.5180.95
ROE9.577.254.965.2910.325.666.55
ROCE8.816.614.524.829.305.105.64
ROA7.155.473.633.888.174.424.61
Asset Turnover40.5142.5942.3640.9745.6341.2652.01

Future Prospectus  :  Company’s long term security in terms of raw materials i.e. bauxite and coal got a boost with allocation of Utkal-D&E with a minable reserve of about 160 million ton and commitment for Pottangi bauxite deposit with a minable reserve of about 75 million ton.

Aluminium is one of the important industrial metal. From November 2015, Prices are now hoovering around top, while writing this. You can check the Price HERE

 

  • 0

    Overall Score

  • Reader Rating: 0 Votes

Share

About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter