Over eight trading sessions, the shares of National Aluminium Company Limited (NALCO) rallied nearly 18 per cent, backed by rising global aluminium prices triggered by supply disruptions in West Asia. 

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The stock climbed to a high of INR 399.95 (USD 4.35) on Friday, compared with INR 338.95 (USD 3.69) on February 23. The price movement followed developments in the region, including a force majeure declaration by Aluminium Bahrain BSC (Alba) in the midst of shipping disruptions through the Strait of Hormuz and a controlled shutdown announced by Qatar Aluminium Manufacturing Company due to gas supply suspension. 

NALCO, one of the lowest-cost producers of bauxite and alumina globally, operates close to full capacity and remains a major exporter of alumina. The company sells over 1.1 million tonnes of alumina and approximately 500 thousand tonnes of aluminium annually. 

Antique Stock Broking reported that the average London Metal Exchange spot aluminium price for the March quarter stood at USD 3,115 per tonne, marking an increase of 10.1 per cent compared to the December quarter and 18.6 per cent higher than the year-ago quarter. 

The brokerage continued with a “Buy” rating on the stock with a target price of INR 420 (USD 4.57), based on a valuation multiple of six times the estimated EV/EBITDA for FY28.

“Firm aluminium prices and additional alumina volume would aid topline, while reduced bauxite mining costs, coal cost advantage, softer caustic soda prices, and rationalised employee costs would drive cost reduction and support margins,” Antique said. It also expressed confidence in “NALCO’s growth prospects”, which involves initiatives for “critical minerals” exploration, “integrated operations, and net cash position.” 

While global alumina futures have softened compared with the December quarter due to new refining capacity in Indonesia, analysts expect prices to gradually recover as additional aluminium smelting capacity comes online in the region. 

Meanwhile, NALCO continues to expand its production footprint. The company’s brownfield alumina expansion is expected to be commissioned by June 2026 to produce 1 million tonnes per annum. It is also lined up plans for the next two to three years to reinforce its value-added product portfolio with a wire rod mill having the production capacity of 100 thousand tonnes per year and an aluminium foil plant of 12 thousand tonnes per annum. 

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