NALCO’s Big Run: Can Shareholders Expect More?

$NATIONALUM National Aluminium Company Limited (NALCO) has been one of the biggest beneficiaries of India’s ongoing metal rally, with the stock gaining nearly 98% over the last year. But for shareholders, the important question is whether this rise is temporary or supported by real business strength. NALCO operates across the aluminium value chain through bauxite mining, alumina refining, aluminium production and captive power generation. Its recent performance indicates that growth has come not only from favourable commodity prices but also from stronger operations. In FY26, NALCO reported record production levels. Bauxite output increased from 7.26 million tonnes to 7.7 million tonnes, alumina hydrate production rose from 2.1 million tonnes to 2.3 million tonnes, and power generation improved from 6,641 million units to 6,953 million units. The financial impact was visible. Revenue grew from ₹16,788 crore to ₹17,843 crore, while net profit increased from ₹5,268 crore to ₹5,797 crore. Return on capital employed touched nearly 40%, far ahead of the industry median of about 13.7%, indicating efficient use of capital. NALCO is also investing for future growth. The company plans to expand bauxite mining by around 3.5 million tonnes through Pottangi reserves, add 1 million tonnes of alumina capacity through its fifth refinery stream, and develop a new captive power project. For shareholders, this combination of growth and cash generation is encouraging. NALCO also offers a dividend yield of around 2.7%, providing steady returns alongside expansion. However, risks remain. Metal prices are cyclical and earnings can soften when the cycle turns. Expansion projects also need disciplined execution. Even after the rally, NALCO trades at a PE of around 11.9 versus the industry median of 15.6. That suggests investors may still be valuing it conservatively. For shareholders, NALCO’s opportunity now lies in converting a commodity upcycle into long-term value creation.