National Aluminium Company Limited (NATIONALUM) Earnings Call Transcript
January 30, 2026
Earnings Call Speaker Segments
Ladies and gentlemen, good day, and welcome to the earnings call of National Aluminum Company Limited, NALCO, post declaration of the financial results of quarter and 9 months ended December 2025, hosted by Systematix. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Shweta Dikshit from Systematix. Thank you, and over to you, ma'am.
Thank you. Good evening, everyone. On behalf of Systematix Group, we welcome you to the 3Q FY '26 and 9 months FY '26 Earnings Conference Call of National Aluminum Company Limited. I would like to thank the management for giving us the opportunity to host this call. I now hand over to Mr. Bharat Sahu, Company Secretary, NALCO, to discuss the company's financial and operational performance for the third quarter and 9 months FY '26. Over to you, sir.
Thank you, ma'am. Namaskar. Good evening. Warm greetings from National Aluminum Company Limited, Navratna CPSE under the Ministry of Mines. I take pleasure in introducing the NALCO team in today's post earnings call. The team is headed by Shri Brijendra Pratap Singh, Chairman-cum-Managing Director; Shri P.K. Sharma, Director, Production; Dr. Tapas Kumar Pattanayak, Director, HR; Shri Abhay Kumar Behuria, Director, Finance; and Shri A.K. Singh, our newly inducted Director, Commercial. Today, NALCO registered a landmark results for the quarter and 9 months ended December 2025 after the Board took note of the results in the Board meeting held today. The presentation in this regard is already uploaded in the website and also in the stock exchanges, NSE and BSE. Now I will request our CMD sir to kindly highlight the results and the outlook of the company in the coming days. Over to you, sir.
Good evening to all. Today, we have declared our results up to Q3 results as far as our performance, physical and financial performance. Both we have recorded best ever physical performance in Q3 and also up to Q3 and also best ever financial performance up to Q3 and also physical performance. If you see the growth as compared to '24-'25, the growth which we have recorded up to Q3, that is 9 months, '24-'25 if you compare with year '25-'26, 9 months. Income side, we have a growth of 13% and expenditure in spite of our increase in income by 13%, our expenditure has increased by only 6%. EBITDA margin has increased by around 20% and PBT has increased by 25%. That is a 9-month comparison. Volumes of production has increased by 20% in alumina and metal by 3.5% and sales of alumina has increased by 45% and metal by around 5%. This is the first 9 months performance if you see. If you see quarter-to-quarter performance, our volume has increased by around 4% to 5% in terms of hydrate production, metal production and our metals -- our alumina sales and metal sales has also increased by around 20% and 5%. So there has been a strong both physical and financial performance and main reason of this physical and financial performance has been the increase in the volume of production. We have increased the volumes of production. If we see the increase in the revenues, our revenues has increased by around INR 2,000 crores, 9 months revenue as compared to previous 9 months last year. And out of that INR 2,000 crores, the contribution of alumina is around INR 1,600 crores and metal around INR 410 crores. Price has a negative impact of around INR 871 crores, where alumina prices fell by from around $562 to around $385 this year average, and there was a negative impact of INR 1,652 crores. But metal prices have increased, which has given us a positive impact of INR 781 crores, that is increase from $2,538 to $2,867. So we have increased our revenues and our expenditure has not increased that much, and that has increased by only INR 500 crores. That is -- this is the 9-month figure total. And we have saved in power and fuel, the power, which we imported last year was on the lower side. The saving in the power and fuel was around INR 142 crores. Employee cost has also gone down by around INR 118 crores. So the performance -- 9-month performance has been very good. And quarter-on-quarter, if we compare the quarter results, Q3-Q3, this year, Q3 and last year Q3, if we compare the income has increased by around INR 200 crores and the expenditure has not increased that much, only around INR 60 crores, INR 70 crores expenditure increase has been there and the profitability has increased from INR 2,121 crores to INR 2,131 crores. That is the PAT. So -- and the main contribution and the contributing factor has the increase in the volume of production. In spite of reduction in the prices of alumina, our profitability, we were able to maintain because of increase in volume and better efficiencies, that is the improvement in techno-economic factors, that is caustic soda consumption, CP coke consumption. Of course, some techno-economics were not very good, but these 2 major techno-economics have been there. So we are working on that. And further, we are working on increasing the volumes of production, maximizing our efficiencies, which is in our hands and operating the plant in a proper manner so as to maximize our profitability. Thank you.
Ma'am, we may now invite questions from our esteemed participants.
[Operator Instructions] First question is from the line of Amit Lahoti, from Emkay.
Congratulations on a good set of numbers. My first question is on alumina contract. In Q3, how much alumina shipments were linked to LME and how much were spot sales? And what is the spot versus contract mix in Q4.
Okay. That is the only question, some other question?
So yes, so that was the first question.
You want me to answer it?
Yes, please.
Q3, each month, we have done around 4 shipments, all the month. And we had 3 shipments in spot and 1 shipment in LME in Q3.
Okay. And all were of same quantity?
Yes, yes. 3 shipments -- all shipments are of 30,000 tonnes. On an average, we do 4 shipments per month. We have done almost on an average 4 shipment. And out of that, one was on term basis that was on basis of LME and all rest of the 3 were spot.
And for Q4, is it going to be the same mix? 75-25?
Almost same mix. One shipment we have for LME and the rest is for spot.
Right. And as a follow-up to this, have we started signing long-term contracts for the new refinery?
New refinery, we'll be starting the commissioning process in June and taking around 2, 3 months to finally -- 3, 4 months to stabilize it. We are expecting that around 3 lakh tonnes of alumina production from there from this year onwards. So we are trying to have some long-term contract, 1 year or maybe 2 years. We'll be going in some interested parties are also there. Middle East, some parties have approached us for long-term contract that is 1 year, 2 year, 3 years. We will be floating some tenders. If we get better offers, we'll be going for it. It only depends on what offer we are getting.
Right. Got it. And my second question is on critical minerals. There were some news articles indicating that we are looking to extract critical minerals from alumina red mud that we end up producing. So what is the plan there? If you could indicate any sort of time lines for visibility of this project?
As far as extraction of critical minerals from red mud is concerned, we are in the process of -- we are having an MOU with NML Jamshedpur, where they are in the process of setting up a pilot facilities for making the methodologies for extraction of rare earths from the critical minerals. Already, they will be taking around 1.5 to 2 years to set up this whole technology. Another is we have one party from Chennai in which we have done the MOU. They have set up their reactor in our mines, and they have taken some of the samples of red mud. They are into the process. Already, they are doing some experiments around that, but results have not come till now. They are also -- they will be extracting some critical minerals. The third is -- that is not from red mud, that is from Bayer's liquid. We are having one MOU with BARC, where they are setting up pilot plant that is extraction of gallium from the Bayer's liquid. These are the 3 projects which we are taking. But as of now, on commercial scale, we don't have any results from the pilot scale, it will take around 1, 1.5 years to set up and get some results for the commercial scale extraction.
The next question is from the line of Aditya Welekar from Axis Securities.
So my question is with respect to our alumina sales volume. So in the last call, we have said that for full year fiscal '26, we will achieve 1,300 KT. And so far in the 9 months, we are already at 1,100 KT. So are we going to raise this guidance of sales volume for alumina? In Q3, we have seen a very good jump in alumina sales.
In Q3, the sales was better. And our target of around maybe 1,250,000 or 1,300,000 whatever we are targeting. But this month, January, it has affected. There is tension in Middle East, which is affecting our exports to Middle East. But this month, January, it was on slightly lower side. But February and March, we'll be trying to make up those losses that were done. But as per plan, maybe 1,250,000 or 1,300,000 we'll be able to reach.
Okay. Understood. Understood. And the second question is with respect to the chemical, means alumina division profitability, means we have seen a drop in that. One part may be due to the -- because of the fall in the alumina prices. But is there any -- apart from the decline in alumina sales realization, is there any inflation from the cost side, especially with respect to caustic soda, which has led to the drop in the EBITDA per tonne for the Chemicals division?
As far as alumina sales are concerned and the margins from alumina is concerned, of course, there has been reduction in the sales prices from around $580, it's gone down to around $380 first 9 months if you compare. Caustic soda, we have improved on caustic soda consumption, specific consumption caustic soda, which last year, which was around 121 kg has come down to around 99 kg. There, we have got a saving. Of course, the prices have increased from around INR 39 to, I think, INR 45 impacting around INR 82 crores negative. But overall impact is not there because we have -- there is a saving in INR 129 crores efficiency. Because we have saved on the efficiency, we have improved our performance. There is a saving of around INR 129 crores on caustic soda. That is the thing which we have negated the increase in the prices by reducing our consumption. But of course, the prices of alumina, which has gone down, that is only affecting us.
The next question is from the line of Pinakin from HSBC.
Many, many congratulations for what is a record quarter, and it looks like the records will continue given the LME prices are. Sir, my first question is what would be the blended alumina realization for the company? If we just do the math of segment revenue divided by production volume, it comes to around INR 28,864. Would that broadly be correct?
You are talking about realization?
Yes, sir.
Alumina realization. Yes, whatever we will be getting, that will be somewhere around $320 or $310 average in Q4.
And at this point of time, sir, it looks like this should be the realization trend, which will continue in fourth quarter as well?
Similar will be continuing in the fourth quarter. We are expecting not more than $310 or $320.
Understood. And sir, what is aluminum cost of production this quarter? And how did it change versus the September quarter?
You're talking about aluminum or alumina?
Aluminum, sir.
Aluminum. Our cost range INR 150,000 to INR 160,000. And in between that INR 10,000 range, somewhere it is INR 155,000, INR 156,000, somewhere it is INR 153,000. And average cost is coming around within that range only.
Understood. And sir, what is the outlook for cost? Do you expect that to remain stable or move...
Q4, our cost will increase slightly because our CT Pitch, our CP coke cost has gone up. Caustic soda costs whatever we have tendered and ordered in December, that costs have gone up. So Q4 cost will slightly go up, still to calculate. It will overall depend on the efficiencies and our specific consumption.
But the prices have increased...
Should be around I think, INR 7,000, INR 8,000 CP coke -- I think INR 7,000, INR 8,000. Though there is a negative impact on price because we are going to wear that burden. We are improving our techno-economic front also to take care of that additional cost, which will be coming in the fourth quarter through increase in price of input prices. So there will be not much impact on our total cost.
Understood. And sir, my last question is there is a meaningful decline in employee cost on a quarter-on-quarter basis. What drove it? And when would you need to start making provisions for the next series of wage hikes?
There are 2 aspects for this cost reduction. If you compare with the CPLY of last year, corresponding period of last year, last year, around INR 300 -- 300 numbers of employees have been superannuated. And the recruitment of this year is not commensurate with that return. So that is one of the advantage. Second, we have made some accounting provision towards our PRP, which is not required now because we have calculated actual calculation and whatever excess provision we have made, we have withdrawn this quarter, this quarter 3. That is also around INR 50 crores that is impact. Okay. Another INR 118 crores is total reduction of employee cost if you compare with the corresponding period of last year, INR 50 crores on account of that accounting provision and another because of reduction in the manpower real cost, but that is superannuation of the man power.
Got it. And sir, about the provisions that you would need to make for the next wage bill, when should we expect June '26 quarter or later or later?
That is for ours, I think it will be from 1st January '27. Then we'll make it because this is the 26th. This year, we don't require because our price -- pay revision due on 1st January 2027.
The next question is from the line of Pallav Agarwal from Antique Stock.
Congratulations on the good results. Sir, first question was a clarification on the aluminum COP. So this figure of 150,000 to 160,000. So this is on an integrated basis, right, with captive alumina, just to clarify.
Yes, -- this is on the captive alumina. Whatever alumina prices we are manufacturing cost...
We are transferring the alumina to our smelter plant on cost.
On cost. Okay. And the second one was on how has been the trend of domestic premiums? I think we sell most of our aluminum in the domestic market. So how is the movement in physical premiums been in the third quarter?
The premiums actually totally depends on the LME. This year -- last year, our average LME was around $2,500. But this year, average LME, we are getting is around $2,800 -- more than $2,800. So there has been $300 around $300 to $340 increase in the LME is giving us a better premium. But as far as the premium from ingot to wire rod is concerned, last year, we were getting better. Ingot to wire rod premium last year was around $10,000, we were getting around 6,000 to 7,000 only. So overall, there is increase in LME. So that is giving us a better premium.
Sir, what is the right way to look at this? Is it like linked to the MJP -- or is it like a percentage of the LME or is it on a per tonne basis, what is the right way to look at the premium?
I'd like to look it as -- on the basis of LME because our pricing, whatever we are doing is on the basis of LME. On the basis of whatever MJP is there, some kind of sometimes we have to give some discounts and all that for [indiscernible] MJP.
We have a pricing policy where we take LME as a base and we add premium as per your version, we take sometimes MJP premium. Then there is some modalities fixed on price. All factors is being taken care of while we do price. Our pricing mechanism every 3 days, if the LME prices crosses some limit, we do. So that is a transparent policy we have. We are adopting that.
Okay. And probably the import duty also of 7%.
See, that is a part of our policy, that policy guideline is there. We will follow by that -- we'll go by that only.
Okay. Sure, sir. Also, sir, can we look at any more savings in power and fuel for the fourth quarter or captive coal now we have fully reached the 4 million tonnes of captive coal production?
Production already we have targeted 4 million tonnes, which will be reaching. We are going by that rate. And that is as compared to last year, the savings will be there. The reduction in the procurement of coal from e-auction and the linkage coal, there will be reduction. And we are looking after that, that up to Q3, the saving has been around maybe INR 30 crores or something like that. Q4 also some savings will be there because the effect is going down because the prices of linkage coal has also come down. And the difference at present, if you see the price difference between linkage coal and our captive coal is around only INR 200 to INR 250 per ton.
After withdrawal of that GST compensation sales, INR 400 per tonne, which is not being paid on the linkage coal. So our difference between the captive coal and FSA coal agreement is around [indiscernible].
The next question is from the line of Rajesh Bhandari from Nakoda Engineers.
Sir, congratulations for good numbers. Sir, you just now mentioned about the coal mining, so when we are having our own mines, when we are mining from our own mines, is that cheaper or taking from outside is cheaper?
Our own captive mines, the cost -- landed cost at our power plant, the difference between that coal and the coal which we are taking from outside is around -- difference is around INR 200 to INR 250 depending on the source...
Which one is higher, sir? Which one is higher?
The coal which we are taking from outside. Our captive coal is cheaper, around INR 200.
Then why can't we have our own mines, sir?
We already [indiscernible] mines and the rated capacity of the mines is 4 million tonnes. So we are ramping the production of that mine up to 4 million tonnes this year. And we are in the process, maybe some more mines in the coming times when we are going for expansion, we will be...
Yes, yes, yes, that's what I meant. Sir, you said about red mud, some critical minerals -- that is right. And do we have any plan for new mining for the critical minerals, new mines?
New mines for the critical mineral, whatever there is, that is one JV company, KABIL is there, [indiscernible], which is having 5 mines in Argentina they have got. They have done non-invested exploration. Now invested exploration is going on. Maybe it will take 1.5 years to get the results of this exploration. And we'll come to know the amount of lithium that is a lithium mine. Lithium -- what level of commercial mining we'll be able to do. Already mines...
There we will have our partnership?
Yes, yes. NALCO is around 40%. HCL and MECL is 30%.
[Foreign Language] Alumina prices had gone down. When aluminum prices are high, why should alumina price go down, sir?
You see there is an excess of alumina in the market. In Indonesia, 2 refineries have come up and a few of them are closed down [indiscernible] smelting capacity has gone down and refining capacity has come up more so. There is an excess of alumina in the market. That's why there is a price reduction and the prices of alumina solely depend on demand supply.
Yes, correct. And this is going to remain forever?
Yes, I don't know forever, but this year, it's going to remain. If the smelting capacity is somewhere -- but of course, Thailand and Indonesia, the smelting capacity is supposed to come up maybe next year, it will stabilize. That may be some reduction in [indiscernible] they are now presently having excess of alumina. So some [indiscernible] will be taken care. But now as of now, this year, the visibility is not there, a similar kind of...
Another main reason is in addition to [indiscernible] around 60 million plus. So they are now capping their capacity 45 million. That is one of the reasons when they will increase production, it will automatically go up also.
[Foreign Language]
Already, we are in the process of it. We are already in the process of appointing one consultant for making DPR and our road map is maybe this year by maybe this year, June, July, August, we'll be finalizing the DPR. After that, 36 months, we have made our road map. And maybe by end of December '30 or maybe early first half of '31, 2031, we have to make -- add another 0.5 million tonne capacity -- smelting capacity. That is the road map, and we are going ahead with it very aggressively.
Sir, one last question. Why the finance cost -- Sir, only one question. Finance cost, why it has gone up too high, sir?
Which one?
Finance cost.
That is not the finance cost. Actually, that is the one thing we have made some settlement this quarter. There is a settlement, okay? The interest component as per -- in this, the interest component of the settlement will be put under finance cost because the...
The next question is from the line of Manav from Yes Securities Limited.
First of all, congratulations on the results. And my first question is, if we take a look at Slide 9, where the company has mentioned the LME price trend. I just wanted to get an outlook because it's mentioned that LME prices are expected to average around $2,670 for aluminum for this particular year. So what's the management's view on the aluminum pricing trend going ahead?
You see, as of now, the LME is somewhere around $3,200. We were expecting to remain somewhere around $2,900, $3,000, but it has increased. And the main reason which we are seeing is some reduction in supply from smelters closing down, capacities of -- China's capacity cap and all that. So there is, of course, demand supply issue. So we are expecting this year, maybe this quarter, it will be somewhere around $3,000. It should remain $3,000 LME. And next year also somewhere between $2,900, $3,000, $2,800, $2,900. Average $2,900, we can expect that. But obviously, it will be more than $2,600.
Got it. And second question is, sir, on the caustic soda, we have had savings of around about INR 129 crores. Could you give what was the landed costing for caustic soda on a per tonne basis? You mentioned 45,000, right?
Landed cost of caustic soda...
The 9 months average if you see '25, '26, it was around INR 42,000, okay? For the next quarter, the cost will go up to INR 55,000, fourth quarter of this year.
The next question is from the line of [Pratik Kothari] from C.R.Kothari & Sons. As there is no response, we'll move ahead. The next question is from the line of Vikash Singh from ICICI Securities.
Sir, my first question pertains to our alumina input to aluminum output ratio. Has it changed? Because if I just calculate 2 tonnes of alumina per tonne of aluminum, so we have sold almost 80 KT, 85 KT higher than what would have been the residue left after the aluminum production. So could you just give us some insight into it?
You see our volumes of production of alumina has been on the higher side -- excess alumina. That's why we have increased our alumina export. Aluminum, whatever aluminum we are making around 2 tonnes of alumina is required per tonne of aluminum. So as per requirement is sent to the smelter. So whatever exports we are doing is because of the excess in the production and the volume of the alumina.
Sir, there is still 2 tonnes of alumina per tonne of aluminum right?
Yes. Yes. 1.93 tonnes.
Noted, sir. Because there was some additional [indiscernible] you have sold it. If you would have used this ratio, fine.
Actually, what is happening is we have a storage capacity of around 75,000 tonnes in Vizag, around 45,000 tonnes in our refineries and around 1 lakh tonnes in our smelters. So the storage capacity, what storage we have, that keeps on changing. So that determines the overall ratio. That is very important to see what was the storage capacity at the beginning of the year and what is the storage now, okay?
So can I assume that we have depleted our storage capacity to a larger extent because that's 50 KT to 80 KT additional, which would have come from there itself.
No, no. That storage capacity almost whatever we had in the beginning of year, our stocks of alumina in the smelter, of course, in the beginning of year, the stock was around somewhere around 15 days. Now we are nearing around 10 to 12 days. 2, 3 days lesser stock in smelter is there. But as far as our Damanjodi, all the silos are full. Vizag also our stock is around 60,000; 55,000 that is the average we maintain in the Vizag. Only in -- our smelter around 2, 3 days stock means that will be around maybe around 7,000 to 8,000 -- 8,000 to 10,000 approximately.
Sir, my second question pertains to basically just clarification on the statement which we have made that from the new alumina refinery, we said we are expecting 3 lakh kind of the production next year. In our previous call, we were talking about roughly about 5 lakh.
Yes, yes. Previously, we were talking...
Has anything changed in time line or it has been delayed something?
We will be starting the commissioning. The total refinery capacity is around 10 lakhs. So since we will be starting the commissioning in June, but it takes 2, 3 months to complete the commissioning process, stabilize the production, maybe after June, September, October, we'll be having maybe going to 60% level of the total rated capacity and full capacity will be going to be around December. So that's why we are taking a more realistic figure of 3 lakhs. We can have somewhere in between 3 lakh to 5 lakhs. But to be more realistic, it will be around maybe 3 lakhs.
And sir, lastly, on our overall CapEx for this year and next year and also what kind of employee cost addition we are expecting from next year due to wage revision? Any provision which we have started to make or we will make in 4Q?
This year, we are not having any wage revision. Whatever wage revision will happen that will happen '27 onwards. The employee cost will be almost same this year also. Slightly reduction will be there due to retirement. We will be having around 200 to 250 superannuation, and whatever superannuation is happening even more senior category people. So of course, there will be again reduction of around maybe INR 100 crores or maybe INR 70 crores, INR 80 crores of reduction in employee cost if you see 9 months or 12 months figure. This -- there will be not any increase in due to wage revision impact that will come from next year onwards.
Yes. So on the next year, what kind of wage revision or just can tell me what is the percentage of last time you had given the hike? And is that hike has something to do with your profitability levels as well? If you have a higher profitability, so probably a higher wage hike you have to give or it is not impacted by the profitability?
Our wage revision is due from CPSE, it is from 1st January 2027 onwards, okay? So next fiscal '26, '27, the impact will be in 3 months. We'll be making provision, some guidelines when the government of India will form a committee for finalization of this agreement. Then we'll make some other provision for 3 months only. But that provision will not be enough because our retirement and superannuation for '26, '27 will be to a great extent and the high wage people will be retired and the induction will be at the lower level. So overall, there will be no increase in the employee cost.
Noted, sir. And sir, CapEx for this year and next year? If any?
CapEx this year will be around INR 1,700 crores. This financial year, what we are expecting is INR 1,700 crores. And next year, we are targeting around INR 1,800 crores to INR 2,000 crores next year. But '27 onwards from next financial year onwards, it will increase.
Yes. On the new smelting facility?
That is this year. We do the ordering and all that by next year, April, May. So '27, '28, that will increase.
The next question is from the line of Rajesh Majumdar from 361 Capital.
Congratulations on a very good achievement. Sir, my first question was, if you look at the alumina sales and if you extrapolate the revenue, the average realization for the quarter comes out to be about $380. And that you are saying for fourth quarter will become between $310 to $320. Is that correct?
Fourth quarter will be average $320.
And this quarter is $380?
No, that was first 9 months was $380. Q3 was $349. $380 was for 9 months.
Okay. INR 350 Okay. Right. And what was the average exchange rate for the quarter?
Q3 exchange rate.
Q3 exchange rate average INR 87. Sorry, 9 months, it was INR 87, Q3, INR 89.
Sir, my second question is on the power and fuel. We've seen a reduction this quarter, which will normalize or which should be remain -- like what do you envisage the annual power and fuel cost now that we are getting the coal from our blocks. What should the annual cost of power and fuel stabilize at?
The coming quarter, I think the fourth quarter, the power and fuel cost will be less than the third quarter because third quarter, there is some problem we have imported some power. So that has added to cost. But that will not happen in the next quarter because all our boiler is in good shape, and we'll be managing maximum power through our internal generation only.
So third quarter itself there is a fall of INR 70 crores. You're seeing a further fall on that?
Pardon?
Third quarter itself is a fall of about INR 70 crores from 2Q. There is further fall on that.
Q2 there is a reduction in INR 70 crores...
Q2 to Q3 of current fiscal compared to last year.
Q3 over Q2 -- last Q2.
Last Q2, because our -- that is one reason is there because the Q3, there is no impact of that sales, INR 400 coal sales, GST compensation sales. It has been withdrawn. That benefit we have got in the third quarter because the withdrawal is July, September onwards, but the benefit in the third quarter, we have got both in the -- that is the linkage coal. That is one of the major reason.
Right. And why is there a sharp jump in the operating expenses from INR 600 crores to INR 725 crores? And how should we look at this going forward?
Operating expenses, if you see that is increase in coal, increase in the volumes. Volumes are increasing, there will be increase in the consumption of raw material and all that. That's because of the increase in volumes, operating expenditure has increased.
But if you compare with the revenue, the jump is not in that -- because revenue has increased 13%, our cost expenditure is only 6% total. So operating costs, when you are increasing your volume, raw material consumption, other direct variable cost will automatically increase.
You see last year, our alumina production was 2,050,000. This year, our average alumina production rate is going to around 2,250,000. Maybe we'll be reaching 23 lakhs. We'll be doing around 2.5 lakhs more alumina this year. So of course, the raw material consumption and all that increases. Even metal production also will be around 10,000 to 12,000 more as compared to last year.
And what is the LME premium, my last question that you have got this year -- this quarter on the metal?
This quarter, LME -- Q3 you're telling?
Q3. Yes.
Q3 average LME was around $2,800. Premium you are telling?
Premium we don't revise regularly because we have a pricing policy, we fix the premium ones and that is inbuilt in our pricing policy itself. So we don't regularly revise that premium.
Last quarter premium we have got around was $50. That is being part of our pricing [indiscernible].
The next question is from the line of Sumangal from Kotak Securities.
So first question is on Alumina division. You said one shipment is sold, prices are fixed on LME. So this -- is this as a percentage of aluminum. LME we are selling alumina or this is the Australia alumina FOB price index we are talking about?
Yes. Whatever -- one shipment, which we are doing, that is percentage of LME. Some shipments are around 12%, some is around 11.5%, depend on whatever tender prices we are getting.
Understood. Understood. And for FY '27, also it is same ratio?
Yes, it's almost same. Whatever long-term tender we are going, it is going on the lower side because LME is increasing. LME is going to be around [indiscernible] maybe more than $3,000. So the percentage is going down.
No, for the LME linked volume, we are selling in the same proportion, 1/4 on LME linked and...
It's almost average shipment we try to do on term and shipment on spot.
Understood. Sir, we have also started selling in the domestic market. So what is the realization difference between domestic and exports in alumina division?
Realization, if you see domestic and export, it is almost same, not more.
No, there is a difference -- hardly any difference of 1,000, 2,000 because of addition of that export incentive that we added. So we added some incentive -- which got [indiscernible] quantity exported. So the price difference is not much. That is around INR 2000 -- INR 1500.
Understood. And sir, when we are targeting 1.3 million tonnes volume for this year, we sold 1.1 million tonne so far. So fourth quarter would be just 200,000 tonnes, right? Or we can actually destock more.
No, no. That will be around whatever we have planned, not more than that, around maybe 12.5 to 13 totally depend on whatever requirements are there because the disturbance in the Middle East that has affected our exports to Middle East in the month of January. We could do only 2 shipments. We're trying to increase the shipment in February and March, make up that. It will totally depend on how the conditions are there in middle east.
Understood. And sir, with respect to aluminum division, can we practically sell or produce more than 470,000 tonnes. Can we operate at more than 100% utilization?
You see our rated capacity is 460,000 and we are going for 470,000 now. 472,000 in fact, this year, we are trying to reach 472,000. One area where we are exploring is getting some scrap. If we get some good quality scrap because our hot metal production capacity is 470,000, but our casting capacity is more. We have got additional maybe 50,000, 100,000 tonnes of casting capacity. So we can easily increase the cast metal production capacity if we get good quality scrap. We are trying to source the scrap, but now we are not able to get good quality scrap. That's why if we get quality maybe 10,000, 20,000 tonnes of scrap, we'll be able to increase our cast metal production capacity.
Understood. Sir, on the aluminum division, a few companies are hedging volumes on a forward basis. Are we doing anything of that sort or everything is open to spot prices?
Hedging, you are talking about hedging?
Yes. Forward sales.
We have not adopted a hedging mechanism now because we don't think our model of business, if you see alumina and metal both. So this hedging, we don't feel this is required now, but we don't have any commitment. Our balance sheet is so strong. We don't have any cash flow commitment. So if the situation comes up to '27, '28, when our CapEx plan will be in full swing and we have committed cash flow and we need to protect our EBITDA and margin, then we will think of this hedging. Till now, we have not gone through that periphery.
Understood. Understood. And sir, with respect to aluminum division, what is the dependence on grid for power requirement? What is the percentage? And is it changing over the last few years?
Very less. Power, very less, whatever power we require around 800 megawatts that we are totally taking from our own captive source. Sometimes in case of some maybe less breakdowns, some breakdowns we depend on the grid. Almost 96% to 97% of...
How much, sorry? 10%?
I think -- no, no, not 10%. I think it must be less than 5%...
Actual, till date up to 9 months, we have imported 90 million.
Okay. And sir, with respect to carbon...
We have generated around 5,773 million units.
[indiscernible] 100 million you said, okay. Sir, just 1 or 2 more questions. With respect to the carbon -- CP coke, CP pitch, et cetera, what is the inflation we are seeing? And when is it likely to hit...
CP coke and CP pitch. CP coke price we are expecting that the fourth quarter, it will be around INR 2,000 more what we have in the last 9-month average, it is around INR 52,000. It will be around INR 54,000 in the next quarter, quarter. That is the increase. And CP coke there is a huge increase INR 12,000. But CP pitch, there is an increase of INR 51,000 to INR 53,000. CP coke, INR 43,000 to INR 54,000.
Okay. So roughly 20%...
More than 20% CP coke. Average price was INR 42,764 and we are expecting in the new contract, it is around INR 54,600. So there is a jump of -- huge jump that INR 12,000.
And when is this getting reflected from fourth quarter?
Yes, yes. Before it will be reflected.
Is this an annual contract? Or is it a quarterly or monthly?
We do for 6 months. This contract is from January to June.
Got it. And sir, one last question on CapEx. You said around INR 1,800 crores to INR 2,000 crores this year. Is it possible to split how much we are spending on maintenance and how much on the refinery -- and then how much is left on refinery?
Refinery, we have planned in this -- you are talking about the next fiscal '26, '27.
So this year, you said around INR 3,000 crores, right?
This year is INR 1,700 crores. '25, '26 around INR 1,700 crores CapEx. I think INR 600 crores to INR 700 crores MR that is additional modification and replacement project and the rest is [indiscernible] projects.
INR 1,000 crores is growth and INR 600 crore, INR 700 crore is MR?
Within that range.
Okay. And sir, in this refinery, 1 million tonnes, how much will be left, which will be spent in FY '26, '27.
[indiscernible] We have already spent INR 5,000 crores. And I think next year, it will be around INR 500 crores to INR 600 crores.
Got it. And just if I may ask one more question, sir, we were doing some JV on caustic soda. Is that producing? And are we getting any cost benefit or the profits are getting factored in...
No, we are not getting any benefit because we are getting a raw material security because we have an agreement with them, joint venture agreement, and we will be procuring 1.5 lakhs from them at the price which will be discovered through tender. Whatever price -- okay. Now we are going to review that pricing policy and...
Actually what is happening since we have assured quantity of 150,000 from there, if that quantity is not available, there will be a deficiency in the market and other suppliers will increase their prices. So this JV goes [indiscernible] curtailing the -- increase in the prices.
Ladies and gentlemen, that was the last question. I now hand the conference over to the management for the closing comments.
Thank you. On behalf of NALCO, I thank all the esteemed participants who took out their valuable time and participated in this conference call. This shows your keen interest in the business activities of this Navratna CPSE NALCO. Thank you team Chorus for facilitating this post-earning call for Q3 results of NALCO. We are also grateful to team Chorus, Systematix, for hosting the earnings call on quarter-on-quarter basis and we solicit your cooperation in future also on a continued basis. Thank you all and we look forward to similar cooperation in the future as well. Thank you.
Thank you. On behalf of NALCO, we conclude this earnings call. Thank you for joining us. You may now disconnect your lines.
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