National Aluminium Co. (NACL IN) – Q4FY26 Result Update – Need to accelerate capex; play on metal price – HOLD
Published on 02 May 2026
In FY27, NACL’s captive coal mines are expected to meet ~67% (4.8mt) of its coal requirement and keep the cost structure lean. Employee costs are expected to rise by 10-15% YoY due to 8th pay commission impact, however, higher volumes should help moderate per-ton costs. NACL continues to benefit from higher LME metal prices, but limited volume growth due to capacity constraints and execution timelines restricts upside to valuations. On the pricing front, alumina is expected to remain weak given global capacity additions, while aluminium prices could normalize if geopolitical disruptions ease and LME could fall back to $ 3,000-3,100/t, as per mgmt. We raise FY27/28E EBITDA by 8%/7%, assuming higher LME prices of $ 3,300/3,232 (earlier $ 3,150/3,131). Every USD100 increase in ally prices would lead to ~5% upgrade in our NACL EBITDA. Maintain ‘HOLD’ with revised TP of INR 413 (from Rs 407, assigning same 5x EV/EBITDA multiple). At CMP, the stock is trading at 5.5x/4.9x EV of FY27/28E EBITDA, which appear full in the absence of meaningful volume growth.
