Nalco Share Price dips after rising over 30% Last Week

Nalco share price dipped over 6 per cent intraday after correction and profit booking. It was performing very well last week and had surged more than 30 per cent. Public sector aluminium company Nalco plans to utilize the internal cash reserve of around Rs 3,500 cr in its ambitious domestic expansion plan and also has expectations to report a higher business growth in the second half of the current financial year with improved demand environment. The chairman and managing director, TK Chand, told the media that higher pricing of the metal would soon reflect in firm's balance sheet.

Nalco had before drawn up an ambitious expansion plan at an investment Rs 37,000 cr for next 5-7 years, which encompassed establishment of greenfield units abroad.

As part of the firm's domestic expansion plan, the firm is exploring opportunities for setting up a novel unit at Angul in Odisha at an investment of Rs 12,000 cr. The company’s plans also include setting up of a 1 million ton per annum alumina refinery at Damanjodi in Odisha at a cost of around Rs 6,000 cr. Alumina is an inter-mediary product in aluminium production.

To secure raw material supply, especially coal, the aluminium company will develop Utkal D and E coal blocks along with Pottangi coal mines at an investment of close to Rs 300 cr. Nalco shall also set up a caustic soda unit in the state of Gujarat and invest Rs 500 cr in the wind energy segment. At 12:19 pm, Nalco share price traded down 6.35 per cent on the NSE.

Talking on business environment, Chand said that business is expected to be better in the second half of current fiscal as compared to the first half. The firm's capacity utilization remained at optimum levels, Chand quoted.

With improved pricing of aluminium, Nalco also sees higher profitability in the 3^rd quarter ending December. Global price of aluminium at London Metal Exchange is currently hovering around 1,725 dollars per ton. Aluminium prices have seen 5 per cent improvement in October-November, benefits of which shall come in the current quarter.

Q2 Results:

The Company has posted a net profit of Rs 1212.30 million for the quarter ended September 30, 2016 as compared to Rs. 2261.40 million for the quarter ended September 30, 2015. Total Income has increased from Rs 1,815.11 cr for the quarter ended September 30, 2015 to Rs 1,846.07 cr for the quarter ended September 30, 2016.

The chairman added that the company hadn’t started producing coal from the blocks and was procuring coal via a linkage from Coal India. For more, visit Nalco share price history.