Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
National Aluminium (NALU.BO; Rs90.25; 3L)
Takeaways from Mumbai — Nalco presented at the Citi India Investor
Conference in Mumbai. Below are the key takeaways.
Expansion Plans — Nalco's alumina capacity expansion from 1.6mtpa to
2.1mtpa is likely to be completed in FY12. This would be enhanced further to
2.28mtpa via debottlenecking by March 2012 (capex Rs5bn). Nalco has plans to
increase alumina capacity by another 1mtpa (taking total to 3.3mtpa) by 2015 at
a capex of Rs30bn. The company plans to enhance smelter capacity at the
existing location (Angul) from 460kt to 567kt by the upgradation of the smelter
from 180KA to 220KA (capex Rs13.5bn) by 2018, together with two power plants
of 250MW each (capex Rs25.3bn). The company has greenfield expansion plans
in Indonesia – 500ktpa smelter + 1,250 MW; Orissa/Chhattisgarh – 500ktpa
smelter; Andhra Pradesh – bauxite + alumina refinery (1.4mtpa). The Indonesian
smelter will source alumina from the Andhra Pradesh refinery and the Orissa
smelter will use Nalco’s surplus alumina.
Better fuel efficiency — Nalco hopes that its fuel efficiency improves in FY12
vis-a-vis FY11 on account of better quality coal being made available by Coal
India. Average fuel consumption in FY11 was 0.9kg/kwh of power and Nalco
expects this to decline to 0.87kg/kwh. Nalco expects the proportion of imported
and washed coal to decline from 10-12% in FY11.
Cost of production — Nalco is a low cost alumina producer. It enjoys the
benefits of good quality bauxite, low-cost captive power, own railway wagons and
captive port facilities. The average cost of alumina prior to the coal price hike was
$220/t and for aluminium ~$1,850/t. The coal price hike would impact aluminium
cost of production by $80-90/t but Nalco believes that the increase should be
partly offset by likely improvement in coal consumption, higher alumina volumes,
and a lower proportion of imported coal. They have been allotted a coal block
with 70 mt of reserves and are hoping for coal flowing in from there before 2012-
13 (2mtpa).
Nalco's view on aluminium prices — The company expects aluminium prices
to remain around $2,400-2,700/t through 2011, supported to an extent by
increased costs. Nalco is not particularly worried about the large amount of
inventory locked up in financial deals.
Strong balance sheet — Cash balance was Rs51bn as of March 2011. The
expansion capex has been funded through internal accruals and Nalco has zero
debt. Capex was ~Rs6.5bn in FY11 and expected to be Rs11bn in FY12. Nalco
does not expect to raise debt for its medium-term domestic expansion plans.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
National Aluminium (NALU.BO; Rs90.25; 3L)
Takeaways from Mumbai — Nalco presented at the Citi India Investor
Conference in Mumbai. Below are the key takeaways.
Expansion Plans — Nalco's alumina capacity expansion from 1.6mtpa to
2.1mtpa is likely to be completed in FY12. This would be enhanced further to
2.28mtpa via debottlenecking by March 2012 (capex Rs5bn). Nalco has plans to
increase alumina capacity by another 1mtpa (taking total to 3.3mtpa) by 2015 at
a capex of Rs30bn. The company plans to enhance smelter capacity at the
existing location (Angul) from 460kt to 567kt by the upgradation of the smelter
from 180KA to 220KA (capex Rs13.5bn) by 2018, together with two power plants
of 250MW each (capex Rs25.3bn). The company has greenfield expansion plans
in Indonesia – 500ktpa smelter + 1,250 MW; Orissa/Chhattisgarh – 500ktpa
smelter; Andhra Pradesh – bauxite + alumina refinery (1.4mtpa). The Indonesian
smelter will source alumina from the Andhra Pradesh refinery and the Orissa
smelter will use Nalco’s surplus alumina.
Better fuel efficiency — Nalco hopes that its fuel efficiency improves in FY12
vis-a-vis FY11 on account of better quality coal being made available by Coal
India. Average fuel consumption in FY11 was 0.9kg/kwh of power and Nalco
expects this to decline to 0.87kg/kwh. Nalco expects the proportion of imported
and washed coal to decline from 10-12% in FY11.
Cost of production — Nalco is a low cost alumina producer. It enjoys the
benefits of good quality bauxite, low-cost captive power, own railway wagons and
captive port facilities. The average cost of alumina prior to the coal price hike was
$220/t and for aluminium ~$1,850/t. The coal price hike would impact aluminium
cost of production by $80-90/t but Nalco believes that the increase should be
partly offset by likely improvement in coal consumption, higher alumina volumes,
and a lower proportion of imported coal. They have been allotted a coal block
with 70 mt of reserves and are hoping for coal flowing in from there before 2012-
13 (2mtpa).
Nalco's view on aluminium prices — The company expects aluminium prices
to remain around $2,400-2,700/t through 2011, supported to an extent by
increased costs. Nalco is not particularly worried about the large amount of
inventory locked up in financial deals.
Strong balance sheet — Cash balance was Rs51bn as of March 2011. The
expansion capex has been funded through internal accruals and Nalco has zero
debt. Capex was ~Rs6.5bn in FY11 and expected to be Rs11bn in FY12. Nalco
does not expect to raise debt for its medium-term domestic expansion plans.
No comments:
Post a Comment