National Aluminium Co.Ltd. (NSE: NATIONALUM) Q3 2026 Earnings Call dated Jan. 30, 2026
Corporate Participants:
Bharat Sahu — Company Secretary
Analysts:
Unidentified Participant
Amit Lahoti — Analyst
Aditya Velkar — Analyst
Pinakin Parekh — Analyst
Pallav Agarwal — Analyst
Vikas Singh — Analyst
Sumangal Nevatia — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the earnings call of National Aluminium Complete Ltd. NARCO post declaration of the financial results of quarter and nine months ended December 2025 hosted by Systematics. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on a Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mishweta Adikshat from Systematics.
Thank you. And over to you, ma’. Am.
Unidentified Participant
Thank you. Good evening everyone. On behalf of Systematics Group we welcome you to the three QFI 26 and nine months FY26 earnings conference call of National Aluminium Co. Ltd. I would like to thank the management for giving us the opportunity to host this call. I now hand over to Mr. Bharat Sahu, company secretary Nalco to discuss the company’s financial and operational performance for the third quarter nine months FY26. Over to you sir.
Bharat Sahu — Company Secretary
Thank you, ma’. Am. Namaskar. Good evening. Warm greetings from National Aluminium company limited Navaratna CPAC under the Ministry of Mines. I take pleasure in introducing the NALCOM team in today’s post earning call. The team is headed by Sri Brijinda Pratap Singh, Chairman Managing Director 3 P.K. sharma, Director Production Dr. Tapaskumar Patnaik, Director HR3AV Kumar Beoria, Director Finance and 3 A.K. singh, our newly inducted Director Commercial. Today NALCO registered a landmark result for the quarter and nine months ended December 2025 after the board took note of the results in the board meeting held today. The presentation in this regard is already uploaded in the website and also in the stock exchanges NSE and bse.
And now I will request our CMD sir to kindly highlight the results and the outlook of the company in the coming days. Over to you sir. Good evening. Good evening to all. Today we have declared our results K3 and up to K3 results. As far as our performance, physical and financial performance Both we have recorded best ever physical performance in Q3 and also up to Q3 and also best ever financial performance up to Q3 and also physical performance. If we see the growth as compared to 24, 25, the growth which we have recorded up to Q3, that is nine months 24 25.
If you compare with this year 2526 nine months income side. We have a growth of 13% and expenditure. In spite of our increase in income by 13% our expenditure has increased by only 6%. EBITDA margin has increased by around 20% and PBT has increased by 25%. That is a nine month comparison. Volumes of production has increased by 20% in alumina and metal by 3.5%. And sales of alumina has increased by 45% and metal by around 5%. This is the first nine month performance. If we see. If we see quarter to quarter performance our volumes has increased by around 4 to 5% in terms of hydrate production, metal production and our metals.
Our alumina sales and metal sales have also increased by around 20% and 5%. There has been a strong both physical and financial performance. And main reason of this physical and financial performance has been the increase in the volume of production. We have increased the volumes of production. If we see the increase in the revenues. Our revenues have increased by around 2000 crores 9 months revenue as compared to previous 9 months last year. And out of that 2000 crores the contribution of alumina is around 1600 crores and metal around 410 crores. Price has a negative impact of around 871 crores.
Where alumina prices fell by from around 562 dollars to around 380 this year average. And there was a negative impact of 1652 crores. But metal prices have increased which has given us a positive impact of 781 crores. That is increased from $2,538 to $2,867. So we have increased our revenues and our expenditure has not increased that much. And that has increased by only 500 crores. That is this is the nine month figure total. And we have saved in power and fuel. The power which we imported last year was on the lower side. The saving in the power and fuel was around 142 crores.
Employee cost has also gone down by around 118 crores. So the performance 9 month performance has been very good. And quarter quarter. If we compare the quarter results Q3. Q3 this year Q3 and last year Q3 if we compare the income has increased by around 200 crores and the expenditure has not increased that much. Only around 6070 crores expenditure increase has been there. And the profitability has increased from 2121 to 2131. That is the PAT. So and the main contribution and main. The contributing factor has the increase in the volume of production in spite of reduction in the prices of alumina.
Our profitability we were able to maintain because of increase in volume and better efficiencies. That is the improvement in techno economic factors, that is caustic soda consumption, CP Coke consumption. Of course some technomics were not very good. But these two major techno economics have been there. So we are working on that. And further, we are working on increasing the volumes of production, maximizing our efficiencies which is in our hand and operating the plant in a proper manner so as to maximize our profitability. Thank you. Ma’. Am. We may now invite questions from our esteemed participants.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment where the question queue assembles. First question is from the line of Ahmed Lahoti from mk. Please go ahead.
Amit Lahoti
Thanks for the opportunity and congratulations on a good set of numbers. My first question is on Illumina Contract operator, your line is echoing. Please check. Please check.
operator
Sure. So. Just a minute. Management, I think there is an equivalence from your end. Could you please check? Mr. Amit, you can please go ahead.
Amit Lahoti
Sure. My first question is on alumina contract in Q3. How much alumina shipments were linked to LME and how much were spot sales? And what is the spot versus contract mix in Q4?
Bharat Sahu
Okay, that is the only question. Some other question.
Amit Lahoti
So. Yeah, so that was the first question.
Bharat Sahu
Okay, you want me to answer it?
Amit Lahoti
Yes, please. Yes.
Bharat Sahu
Q3. Each month we have done around four shipments all the months. And we had three shipments in spot and one shipment in LME in Q3.
Amit Lahoti
Okay. And all were of same quantity?
Bharat Sahu
Yes, three shipments. All shipments are of 30,000 tons. On an average we do four shipment per month. We have done almost on an average four shipment and autofetch one. One was. One was on term basis that was on basis of LME and all rest of the three were spot.
Amit Lahoti
And for Q4 is it going to be the same mix? 75, 25.
Bharat Sahu
Almost. Almost same mix. One shipment we have for LME and the rest is for.
Amit Lahoti
Right. And as a follow up to this, have we started signing long term contracts for the new refinery?
Bharat Sahu
New refinery. We’ll be starting the commissioning process in June taking around 2, 3 months to finally 3, 4 months to stabilize it. We are expecting that around 3 lakh tons of alumina producing from there from this year onwards. So we are trying to have some long term contract. One year or maybe two years going in. Some interested parties are also there. Middle East. Some parties have approached us for long long term contract. That is one year, two year, three year. We will be floating some tenders. If we get better offers, we’ll be going for it Totally depends on what offer we are getting.
Amit Lahoti
Right? Got it. And my second question is on critical minerals. There were some news articles indicating that we are looking to extract critical minerals from alumina red mud that we end up producing. So what is the plan there? If you could indicate any sort of timelines for feasibility of this project.
Bharat Sahu
As far as extraction of critical minerals from red mud is concerned. We are in the process of. We are having an MoU with NML Jamshedpur where they are. They will. They are in the process of setting up a pilot facilities for making the methodologies for extraction of rare earth from the critical minerals. Already they will be taking around one and a half to two years to set up this whole technology. Another is we have one party from Chennai in which we have done the MoU. They are. They have set up their reactor in our mines and they have taken some of the samples of red mud.
They are into the process already. They are doing some experiments and all that. But results have not come till now. They are also with they will be extracting some critical numbers. The third is. That is not from Dredma. That is from Bairs liquid. We are having one MoU with bark where they are setting up pilot plant that is extraction of gallium from the beer slip. These are the three projects which we are taking. But as of now on commercial scale we don’t have any results. It’s on the pilot scale. It will take around one, one and a half years to set up and get some results for the commercial scale extraction.
Amit Lahoti
Right? Okay, fine. Thank you so much. So much.
operator
Thank you. The next question is from the line of Aditya Velkar from Access Securities. Please go ahead.
Aditya Velkar
Yeah. Thank you for this opportunity. So my question is with respect to our alumina sales volume. So in the last call we have said that for earlier fiscal 26 we will achieve 1300 KT. And so far in the nine months we are already at 1100. So are we going to raise this guidance of sales volume for alumina in Q3? We have seen a very good jump in alumina sales.
Bharat Sahu
In the Q3 the sales was better and our target of around maybe 12 lakh 50,000 or 13 lakh whatever we are targeting but this month January it has affected. There is a tension in Middle east which is affecting our exports to Middle East. But this month January it was on slightly lower size. But February and March we’ll be trying to make up those losses that we have done. But as per plan maybe 1250 or 13 we’ll be able to reach.
Aditya Velkar
Okay. Understood. Understood. And the second question is with respect to the chemical means alumina division profitability means we have seen a drop in that one part may be due to the because of the fall in the alumina prices but. But is there any. Apart from the declining alumina sales realization is there any inflation from the cost side Especially with respect to caustic soda which has led to the drop in the EBITDA per ton for the chemicals division.
Bharat Sahu
As far as alumina sales are concerned and the margins from alumina is concerned. Of course there has been reduction in the sales prices from around $580. It’s gone down to around $380 first nine months. If we compare caustic soda we have improved on caustic soda consumption. The specific consumption caustic soda which is last year which was around 121kg has come down to around 99kg. There we have got a saving. Of course the prices have increased increased from around 39 to I think 45 45. Impact is around 82 crore negative. 82 cr negative. But overall impact is not there because we are.
There is a saving in 129 crore efficiency. Because we have saved on the efficiency we have improved our performance. There is a saving of around 129 crore on caustic soda. That is the thing which we have negated the increase in the prices by reducing our consumption. But of course the prices of alumina which has gone down that is only affecting us.
Aditya Velkar
Underscore sir. That’s it From. I’ll get back in the queue. Thank you. Thank you. Thank you.
operator
Thank you. The next question is from the line of Penaken from hsbc Please go ahead.
Pinakin Parekh
Yeah. Thank you very much sir. For many many congratulations for what is a record quarter and it looks like this records will continue given the REDMI prices are. So my first question is what would be the blended alumina realization for the company? If we just do the math of segment revenue divided by production volume it comes to around 28,008 64. Would that broadly be correct?
Bharat Sahu
You are talking about Realization.
Pinakin Parekh
Yes sir. Yes sir.
Bharat Sahu
Yes. Whatever. We’ll be getting somewhere around 320 or 3 $10 average in Q4.
Pinakin Parekh
And at this point of time sir, it looks like this is would be the realization trend which will continue in fourth quarter as well.
Bharat Sahu
Similar will be continuing in the fourth quarter. We are expecting not more than 3:10 or 3:20 dollars.
Pinakin Parekh
Understood. And sir, what is aluminum cost of production this quarter and how did it change versus the September quarter?
Bharat Sahu
Our alumina cost. If we take the calcine Alumina. Aluminum. Aluminum. You are talking about aluminum or alumina?
Pinakin Parekh
Aluminum sir. Aluminium. Sir.
Bharat Sahu
Aluminum. Our cost range 1 lakh 521 lakh 60. And in between that 10,000 rent. Somewhere it is 155, 156 somewhere it is 153. And the average cost is coming around within that range only.
Pinakin Parekh
Understood. Elsewhere, what is the outlook for cost to remain stable or move.
Bharat Sahu
Q4? Our cost will increase slightly because our CTPH, our CP cost has gone up. Costly soda costs of whatever we have tendered and ordered in December. But costs have gone up. So Q4 cost will slightly go up. Still to calculate it will overall depend on the efficiencies and our specific conventions. But the prices have been around I think seven, eight thousand. Which one There is a negative impact on price because we are going to bear that burden. We are improving our technology front also to take care of that additional cost which will be coming in the fourth quarter through increase in price of input prices.
So there will be not much impact on our total cost.
Pinakin Parekh
Understood. And my last question is there is a meaningful decline in employee cost on a quarter on quarter basis. What drove it and when would you need to start making provisions for the next series of wage hikes?
Bharat Sahu
There are two aspects for this cost reduction. If you compare with the CPLOI of last year. Corresponding period of last year. Last year around 300 rupees. 300 numbers of employees have been superannuated and the recruitment of this year is not commensurate with that return. So that is one of the advantages. Second, we have made some accounting provision towards our PRP which is not required now because we have calculated actual calculation and whatever excess provision we have made, we have withdrawn this quarter. This is gotten three. Then is also around 50 crore. That is impact. Okay.
Another 118 crore is total reduction of employee cost. If you compare with the corresponding period of last year 50 crore on account of that accounting provision. And another because of reduction in the manpower real cost. But that is superannuation of the member Got it.
Pinakin Parekh
And sir, about the provisions that you will need to make for the next wage bill. When should we expect? June 26th quarter or later.
Bharat Sahu
That is for ours. I think it will be from 1st. January 27th. Then we’ll make it. Because this is the 26th this year. We don’t require because our price pay revision due on the 1st of January 2027.
Pinakin Parekh
Got it. Thank you very much.
operator
Thank you. The next question is from the line of Pallavagarwal from Antech stock. Please go ahead.
Pallav Agarwal
Yeah. Good evening sir. And congratulations on the good results. You know. So first question was you know clarification on the aluminium cop. So this you know figure of 1 lakh 52 to 1 lakh 60 thousand. So this is on an integrated basis, right? With captive alumina. Just to clarify this.
Bharat Sahu
Yes, yes. This is also captive alumina. Whatever alumina prices we are manufacturing cost. We are transferring the alumina to our smelter plant. On cost.
Pallav Agarwal
On cost. Okay. And the second one was on you know, how has been the the trend of domestic, you know premiums. I think we sell most of our aluminium in the physical in the domestic market. So how the moment in physical premiums been? You know on the third quarter quarter.
Bharat Sahu
The premiums actually totally depends on the LME this year last year our average LME was around 25, 2500. But this year average LME we are Getting is around 28 more than 28. So there has been a 300, around 300 to $340 increase in the which is giving us a better premium. But as far as the premium from INU to wire rod is concerned, last year we getting better in to wire rod premium. Last year was around 10,000, we getting around 6,000 to 7,000. So overall there is increase in element. So that is giving us a better premium.
Pallav Agarwal
So what is the right way to look at this? Is it like linked to the MJP or is it like a percentage of the lme, you know. Or is it on a per ton basis? What is the good the right way.
Bharat Sahu
To look at the premiums that as on the basis of lme? Because our all pressing all whatever we are doing is on the basis of lme. On the basis of whatever mjp. Is there some kind of. Sometimes we have to give some discounts and all that. Depending on mgp we have a pricing policy where we take LME as a base and we add premium. As per your work we take sometimes MGP premium. Then there is some modalities fixation Price all factors is being taken care of. While we do price our pricing mechanism every three days.
If the LEMI prices is crosses some limit, we do so. That is a transparency we have. We are adopting that.
Pallav Agarwal
Okay. And probably the import duty also of 7%.
Bharat Sahu
That is a part of our policy. That policy guideline is there. We followed by that. We go by that only.
Pallav Agarwal
Okay. Sure sir. Also sir, you know can we look at any more savings on power and fuel. You know for the fourth quarter or captive coal. Now you fully reach the 4 million ton of captive coal production.
Bharat Sahu
Production. Already we have targeted 4 momentum which will be reaching. We are going by that rate. And that is as compared to last year. The savings will be there. The reduction in the probatement of coal from E auction. On the linkage coal there will be reduction. And we are looking after that. That up to Q3 the saving has been around maybe 30 crores or something like that. Q Before also some savings will be there. Because the effect is going down. Because the guidance of linkage coal has also come down. And the difference at present if you see the price difference between linkage coal and our effective code is around 2 to 50 rupees.
After withdrawal of that GST compensation. 400 rupees per ton which is not being paid on the linkage school. So our difference between the captive coal and FSA coal agreement is around 302 to 3 rupees.
Pallav Agarwal
Sure. Okay. Thank you so much. Thank you so much.
operator
Thank you. The next question is from the line of Rajesh Pandadi from Rakoda Engineers. Please go ahead. Rajesh, kindly unmute your mic.
Unidentified Participant
Is it? Can you hear me now? Can you hear me now?
Bharat Sahu
Yes. Yes.
operator
Yes we can sir.
Unidentified Participant
Congratulations for good numbers. Sir, you just now mentioned about the coal mining. So when we are having our own minds. When we are mining from our own minds, is that cheaper or taking from outside is cheaper?
Bharat Sahu
Our own captive minds. The cost landed cost at our power plant. The difference between that coal and the coal which we are taking from outside is around difference is around rupees 200 to 250 rupees depending on the source.
Unidentified Participant
Which one is higher, sir? Which one is higher?
Bharat Sahu
The coal which is which you are taking from outside. Our captive coal is cheaper around.
Unidentified Participant
Then why can’t we have our own mine, sir?
Bharat Sahu
And that the rated capacity of the mines is 4 million ton. So we are ramping the production of that mines up to 4 million ton this year. And we are in the process maybe some more mines in the coming times. When we are going for expansion we will be.
Unidentified Participant
Yeah, yeah, yeah. That’s what I meant. Yeah. Okay. Sir, you said about red mud some critical minerals. That is. That is right. And do we have any plan for new mining for the critical minerals? New mines.
Bharat Sahu
New mines for the critical mineral. Whatever there is. That is one JV company, Kabil is there and MECL which is having five mines in Argentina. They have got. They have done non invasive exploration. Now it’s in invasive exploration is going on. Maybe it will take one and a half years to get the results of this exploration. And we’ll come to know the amount of lithium that is a lithium. What level of commercial mining will be able to do. Already.
Unidentified Participant
There we will have our partnership. Partnership?
Bharat Sahu
Yes, yes. Nalco is around 40%.
Unidentified Participant
Okay, okay.
Bharat Sahu
Is 30%.
Unidentified Participant
Alumina prices had gone down. When aluminum prices are high, why should alumina price go down? Sir, you.
Bharat Sahu
You see there is an excess of alumina in the market in Indonesia two refineries have come up and flow down like closed down Iceland. One filter is the smelting capacity has gone down and capacity has come up more. So there is an excess of alumina in the market. That’s why there is a price reduction and the prices of alumnus only depend on demand supply.
Unidentified Participant
Yeah, correct. And this is going to remain forever?
Bharat Sahu
Yes, yes. I don’t know forever. But this year it’s going to remain capacity somewhere. But in of course Thailand, in Indonesia the smelting capacity is new is supposed to come up. Maybe next year it will stimulate that may be some reduction in. They are now presently having excess of alumina. So some thing will be taken care. But now as of now this year their visibility is not there. The similar kind of another main reason is in addition to same research building is around 60 million plus. But they are now capping the capacity 45. That is one of the reason when they will automatically go also that.
Already already we are into process of it. We are already in the process of appointing one consultant for making DPR and our road map is maybe this year. By maybe this year, June, July, August will be finalizing the DPR. After that maybe 36 months our we have made our road map. And maybe by end of December 30th or maybe early first half of 31, 2031 we have to make add another 0.5 million ton capacity smelting capacity. That is the roadmap and we are going at with it very aggressively.
Unidentified Participant
One last question. Why the finance cost? Sir, only one question is finance cost why it has Gone up so high, sir.
Bharat Sahu
Which one? Finance cost.
Unidentified Participant
Finance cost. Finance cost.
Bharat Sahu
I think that is not the finance cost. Actually that is the one thing we have. We have made some settlement this. This quarter. There is a settlement. Okay. The interest component was there as per. In this. The interest component of the settlement will be put under finance cost because accounting adjustment only.
Unidentified Participant
Okay, thank you sir. Thank you very much. Thank you very much.
operator
Thank you. The next question is from the light of Manav from Yes, securities Ltd. Please go ahead.
Unidentified Participant
Yes. Hi. A very good evening and thank you so much for the opportunity. So first of all, congratulations on the result. And my first question is if we take a look at slide 9 where the company has mentioned the LME price trend. I just wanted to you know, get a. Get an outlook because it’s mentioned that LME prices are expected to average around 26 $70 for aluminium for this particular year. So what’s the management’s view on the aluminum pricing trend going ahead?
Bharat Sahu
You see as of now the LME is somewhere around 32. 32. We were expecting to remain somewhere around 29, 3000. But it has increased. And the main reason which we are seeing is some reduction in supply from smelters. Closing down capacity of China’s capacity cap and all that. There is a of course demand supply issue. So we are expecting this year maybe this quarter will be somewhere around 3000. It should remain 3000 LME and next year also somewhere in between 29, 3000. 28. 29 average. 29. You can expect that but obviously it will be more than 26.
Unidentified Participant
Got it. Got it. Yeah sure. Thank you so much. And second, second question is on the caustic soda we have had savings around about 129crores. Could you give what was the landed costing for caustic soda on a per term basis? You mentioned 45,000, right?
Bharat Sahu
Cost of cost in the nine month average. If you see 25, 26, it was around 42,000. Okay. For the next quarter we have the cost will go up to 45,000 fourth quarter of this year.
Unidentified Participant
Got it? Got it. Thank. Thank you so much.
operator
Thank you. The next question is from the line of Pratik Kothari from CR Kothari and Sons. Please go ahead. So Pratik, kindly unmute your mic. As there is no response, we’ll move ahead. The next question is from the line of vikas Singh from icici securities . Please go ahead.
Vikas Singh
Good evening sir and thank you for taking my question. So my first question pertains to our alumina input to aluminum Output ratio has it changed? Because if I just calculate 2 ton of alumina per ton of aluminum. So we have sold almost 80, 85, 80 higher than what would have been the residue left after the aluminum production. So could you just give us some insight into it?
Bharat Sahu
You see, our volumes of production of alumina has been on the higher side. That’s why we have increased our aluminum export and aluminum. Whatever aluminum we are making around 2 tons of alumina is required in turn of alumina parton of aluminum. So as per requirement to send to the smelter. So whatever exports we are doing is because of the excess in the production and the volume of the aluminum.
Vikas Singh
So it is still 2 ton of alumina per ton of aluminum. Right? Right?
Bharat Sahu
Yes sir. 1.92. 1.93. 1.93.
Vikas Singh
Notice sir, because there was some additional ET. You have sold it over. If you would have, you would have used this nature. Fine.
Bharat Sahu
What is happening is we have a storage capacity of around 75,000 ton in Visa at around 40, 45,000 tons in our refineries and around 1 lakh tons in our smelters. So the storage capacities, what storage we have that keeps on changing. So that that determines the overall ratio. That is very important to see what all the storage capacity at the beginning of the year and what is the storage now. Okay.
Vikas Singh
So can I assume that we have deflated our storage capacity to a larger extent because that’s 50 to 80kt additional which would have come from there itself.
Bharat Sahu
No, no. That storage capacity almost whatever we had in the beginning of year, our stocks of alumina and the smelter. Of course in the beginning of year the stock was around somewhere around 15 days. Now we are nearing around 10 to 12 less 2, 3 days. Lesser stock in smelter is there. But as far as our Raman Jodi, all the silos are full. Vizag also our stock is around 60, 60,000. 60,000. 65,000. That is the average we maintain in the Vizag. Only Damanjo in our smelter around 2, 3 days stock means that will be around maybe around 7 to 8,000.
Now 7 to 8,000. 8 to 10,000 stocks.
Vikas Singh
Second question pertains to basically just clarification on this statement which we have made that from the new alumina refinery we said we are expecting a 3 lakh kind of the production next year. In our previous call we were talking about roughly about 5 lakhs.
Bharat Sahu
Yes, yes. Previously we were telling it has anything.
Vikas Singh
Changed or timeline or it has Been delayed something.
Bharat Sahu
We’Ll be starting the commissioning. The total refunded capacity is around 10 lakhs. So since we will be starting the commissioning in June but it takes 23 months to complete the commissioning process stabilize the production maybe after June, September, October we will be having maybe going to 60% level of the total rated capacity. And full capacity will be going to by around December. So that’s why we are taking a more realistic figure of 3 lakhs. We can have somewhere in between 3 to 5 lakhs. But to be more realistic it will be around maybe 3 lakhs.
Vikas Singh
Notice. And so lastly on our overall capex for this year and next year and also what kind of employee cost addition we are expecting from next year due to wage division any provision which we have started to make or we will make in fourth year.
Bharat Sahu
This year we are not having any wage division. Whatever wage division will happen that will happen 27 onwards employee cost will be almost same. This year also slightly reduction will be there due to retirement we’ll be having around 200, 200 to 250 super and whatever superannuations are happening within the senior category people. Of course there will be again reduction of around maybe 100 crores or maybe 70, 80 crores of reduction in employee cost. If you see 9 months or 12 months figure this. There will be a not any increase in due to wage revision impact that will come from next year.
Vikas Singh
Yeah. So on the next year on only what kind of wage division or just can tell me what is the percentage of last time you have given the hike and is is that hike has something to do with your profitability levels as well? If you have a higher profitability so probably a higher wage hike you have to give us. It is non non impacted by the profitability.
Bharat Sahu
Our division is due from CPSC. It is from 1st January 2027 onwards. Okay. So the next fiscal 2627 the impact will be all of three months. We’ll be making provision some guidelines. When the government of India will form a committee for finalization of this wage agreement Then we’ll make some adult provision for three months only. But that provision will not be enough. Because our retirement and superannuation for 2627 will be to a great extent and the high wage people will be retired and the induction will be at the lower level. So the overall there will be no.
Vikas Singh
Increase in the employee cost Noted. And the CAPEX figure for this year and next year.
Bharat Sahu
Capex this year will be around 1700 this financial year are we what we are expecting is fishing is 1,700. And next year we are targeting around 18,800 to 2,000 next year. But 27 onwards. From next financial year onwards it will increase.
Vikas Singh
Yeah. On the new smelting.
Bharat Sahu
Smelting facilities this year. Or we do the ordering and all that by next year. April. May. April. May 2027. 28. That will increase.
Vikas Singh
Thank you, sir. And all the best.
operator
Thank you. Thank you. The next question is from the line of Rajesh from 361 Capital. Please go ahead.
Unidentified Participant
Good evening, sir. Congratulations on a very good achievement, sir. My first question was. If you look at the alumina sales and if you extrapolate the revenue. The average realization for the quarter comes out to be about $380. And that you are saying for fourth quarter will become between 310 to 320. Is that correct?
Bharat Sahu
Fourth quarter will be average 320.
Unidentified Participant
And this quarter is 380.
Bharat Sahu
No, that was first nine months was created 349. Q3 was 3. 49 with 49 VAT was for nine months. Nine months.
Unidentified Participant
Okay. 3. 350. Okay. Okay. Right. And. And what was the average exchange rate for the quarter?
Bharat Sahu
Q3. Q3 exchange rate. Q3. Yeah. Q3 exchanges your average 87. Sorry, nine months. It was 87. Q3. 89.
Unidentified Participant
Okay. So my second question is on. On the power and fuel. We’ve seen a reduction this quarter which will normalize or which should be remain. Like what do you envisage is the annual power and fuel cost now? Now that we’re getting the coal from our blocks. What should be annual cost of power and fuel stabilize it.
Bharat Sahu
The coming quarter. I think the fourth quarter the power and fuel cost will be less than the third quarter. Because third quarter there is some problem. We have imported some power. So that has added a cost. But that will not happen in the next quarter. Because all our boiler and is in the good shape and will be managing maximum power through our internal generation only. So our grid will be less.
Unidentified Participant
So third quarter itself there is a fall of 70 crore. You’re seeing a further fall on that. Third quarter itself is a fall of about 70 crores. From 2Q you think further fall on that.
Bharat Sahu
There is a reduction in 70 crores. Is saying Q2 to Q3 of current fiscal compared to last year. Yeah. Q3 over Q2 last Q2 last Q2 last Q 2. Because our internal captive. That is one reason is there. Because the Q3 there is no impact of that. Sales 400 rupees Coal Sales GST Compensation Sales has been withdrawn. That benefit we have got in the third quarter because the withdrawn is July September onwards. But that benefit in the third quarter we have got both in the. That is linkage code. That is one of the major reason.
Unidentified Participant
Right? And why is there a sharp jump in the operating expenses from 600 crores to 725 crores. And how should we look at this going forward?
Bharat Sahu
Operating expenses if you see that is increasing because increase in the volumes. Volumes are increasing. There will be increase in the consumption of raw material and all that just because of the increase. But if you compare with the revenue, the jump is not in that. Because revenue has increased 13%. Our cost as expenditure is only 6% totality. So operating cost. So when you are increasing your volume raw material consumption other direct variable cost will automatically increase. You see last year our alumina production was 20 to 20 lakh 50,000. This year our average alumina production rate is going to around 22 lakh 50 thousand.
Maybe we’ll be raising 23 lakhs. We’ll be doing around 2.5 lakhs more alumina this year. So of course the raw metal consumption and all that increases. Even metal production also will be around 10 to 12,000 more as compared to last year.
Unidentified Participant
And what is the LME premium? My last question that you have got this year, this quarter on the metal.
Bharat Sahu
This quarter LME means Q3. You are telling
Unidentified Participant
2, 3 years.
Bharat Sahu
2. 3 years. 3. Average LME was around 28. 28. Premium. You are telling me. We don’t revise regularly because we have a pricing policy. We fix the premium ones and that is inbuilt in our pricing policy itself. So we don’t regularly revise that premium. We fixed it for months. So there is a policy mechanism. Last quarter my premium is. We have got around 50. That is being part of our pricing policy. That is part of pricing.
Unidentified Participant
Tickets. Thank you. Tickets. Thank you. Thanks.
operator
Thank you. The next question is from the line of Sumangal from Kotak securities. Please go ahead.
Sumangal Nevatia
Yeah. Good evening. Thanks for the chance. So first question is on alumina division you said one shipment is sold. Prices are fixed on lme. So this is. This is a percentage of aluminium lme. We are selling alumina or this is the Australia Alumina FOB price index we are talking about.
Bharat Sahu
Yeah. Let me. Whatever. Along with one shipment which we are doing that is percentage of L some shipments are on around 12%. Some is around 11 and a half percent. Depend on the whatever tender prices they are getting.
Sumangal Nevatia
Understood? Understood. And for FY27 also it is same ratio.
Bharat Sahu
Yes, it’s almost same. Whatever. Now term tender we are going. It is going on the lower side because LM is increasing. LM is going to around 32 33. It has gone maybe 30 more than 3000. So the percentage is going down.
Sumangal Nevatia
No, Also for the LME link volume we are selling the same proportion 1/4 on LME link.
Bharat Sahu
Then it’s almost average. One shipment we try to do on turn and the shipment on spot.
Sumangal Nevatia
Understood sir. We have also started selling in the domestic market. So what is the realization difference between domestic and exports in alumina division?
Bharat Sahu
Realization? If you see domestic and export is almost same, not more. There is a difference, hardly any difference of 1:2000. Because of addition of that export incentive that we added price. We added some additional incentive which we have get got hardly this quantity exported. So the price difference is not much. There is around 2,500.
Sumangal Nevatia
Understood? Understood. And so when we are targeting 1.3 million tons volume for this year. This year we sold 1.1 so far. So fourth quarter would be just 200,000 tons. Right? Or can actually restock more? Restock more?
Bharat Sahu
No, no. That will be around whatever we have planned. Not more than that. Around maybe 12.5 to 13. Totally depend on whatever the requirements are there. Because the disturbance in the middle is that has affected our force to Middle East. In the month of January we could do only two shipments. We’re trying to increase the shipment in February and March. Make up that it will totally dependent how the conditions are there in the middle.
Sumangal Nevatia
Understood. And so with respect to aluminum division, can we practically sell or produce more than 470,000 tons? Can we operate at more than 100% utilization? Utilization?
Bharat Sahu
You see, our rated capacity is 460. And we are going for 470 now. 472. In fact this year we are trying to reach 472. 1 1. One area where we are exploring is getting some scraps. If we get some good quality scrap. Because our hot metal production capacity is for like 70. But our casting capacity is more. We have got additional maybe 50,001 lakh tonnes of casting capacity. So we can easily increase the cast metal production capacity. If we get good quality scrap. We are trying to source the scrap. But now we are not able to get good quality scrap.
That’s why if we get good quality maybe 10,000 20,000 tons of scrap, we’ll be able to increase our cast metal production capacity.
Sumangal Nevatia
Understood sir. Aluminum division. Few companies are getting volumes on forward basis are we doing anything of that sort or everything is open to spot prices.
Bharat Sahu
Hedging. You are talking about hedging?
Sumangal Nevatia
Yeah. Forward sales. Forward sales.
Bharat Sahu
We are not adopted hedging mechanism now because we don’t think our model of business if you see alumina and metal both. So this hedging, we don’t feel this is required now. But we don’t have any commitment. Our balance is so strong we don’t have any cash flow commitment. So if the situation situation comes up to 2728 when our capex plan will be in full swing and we have committed cash flow and we need to protect our EBITDA and margin then we will think of this hedging. Till now we have not gone through that periphery.
Sumangal Nevatia
Understood? Understood. And sir, with respect to aluminium division what is the dependence on grid for power requirement? What is the percentage and is it changing over the last few years?
Bharat Sahu
Very less. Whatever power we require around 800 mega megawatt that we are totally taking from our own catfish source. Sometimes in case of some very less breakdowns. Some breakdowns only we depend on the grid almost be 96 to 97% of. Quarter wise you can take.
Sumangal Nevatia
So how much? Sorry? 10%.
Bharat Sahu
10% I think. No, no not 10% I think it must be less than 5% actual till date up to 9 months we have imported 90 million only 90 million 900.
Sumangal Nevatia
Okay, okay. And sir with respect to carbon.
Bharat Sahu
Carbon whereas we have generated around 5,773 million units.
Sumangal Nevatia
1 2% 2% 20 million 100 million years. Okay, so just one or two more questions with respect to the carbon qu c pitch etc. What is the inflation we are seeing and when is it likely to hit? Likely to hit.
Bharat Sahu
Price. CP Coke and CP CP Coke price were expecting that the fourth quarter it will be around 2000 more. But we have in the large nine month average it is around 52,000. It will be around 54 in the next quarter the four quarters that is the increase and city. Each and CP. Coke there will be CP Coke there is a huge increase 12,000. But CTP there is an increase of 51 to 53, 2000. Your city CP code 43 to 54.
Sumangal Nevatia
Okay so roughly 20%. 20%.
Bharat Sahu
More than 20% CP code. Our average price was 42,764. And we are expecting in the new contract it is around 54,600. So there is a jump of huge jump at that 12,000 year old.
Sumangal Nevatia
And when is this getting reflected? From fourth quarter.
Bharat Sahu
From fourth quarter yes. Yes. You hear it in the reflected.
Sumangal Nevatia
Is this an annual contract or is it quarterly or monthly?
Bharat Sahu
Or monthly we do for six months. This is coming from this contract is from January to June.
Sumangal Nevatia
Got it? Got it. And just one last question. On Capex you said around 1800-3000 crore this year. Is it possible to split how much you are spending on maintenance and how much on the refinery and then how much is left on refineries? Refinery.
Bharat Sahu
Refinery. We have planned in the this we are. You are talking about the next fiscal 2627.
Sumangal Nevatia
So this year you said around 2000 crores right?
Bharat Sahu
Right here. This is 1700 2526. Around 1700 capex and I think 600. 600 to 700 is Mr. That is addition, modification and replacement project and the rest is.
Sumangal Nevatia
So thousand is growth and 7800 is 600 is 600 is Mr. Okay. And sir in this refinery 1 million ton how much will be left will be left which will be spent in FIs. 2627.
Bharat Sahu
Till date we have already spent 5500 rupee 5000 crore. And. And I think next year it will be around 500 crore.
Sumangal Nevatia
Got it. And just if I may ask one more question. So we are doing some JV on caustic soda. Is that production producing and are we getting any cost benefit or the profits are getting?
Bharat Sahu
We are not getting benefit because we are getting a raw material security. Because we have a agreement with them. Joint venture agreement and we will be procuring 1.5 lakhs from them at the price which will be discovered through tender. Whatever price will be there. Now we are going to review that pricing policy and we’ll work. Actually what is happening since we have a short quantity of 1 lakh 50,000 from there if that country is not available there will be a deficiency in the market and other suppliers will increase their prices. So this JB has go in a long way just curling the increase in the prices.
Sumangal Nevatia
Understood? Understood. Got it sir. Thank you so much and all the best. All the best.
operator
Thank you. Thank you. Ladies and gentlemen. That was the last question. I now hand the conference over to the management for the closing comments.
Bharat Sahu
Thank you Tim Kouresh. On behalf of Nalco. I thank all the esteemed participants who took out their valuable time and participated in this conference call. This show your keen interest in the business activities of this n. Thank you team forum for facilitating this post ordering call for Tuesday results at Nalco. We are also thankful to team systematic for hosting the earning call on quarter on quarter basis and we solicit your progression on a continued basis. Thank you all. And we look forward to similar cooperation in the future as well. Thank you.
operator
Thank you. On behalf of Nalco, we conclude this earning call. Thank you for joining us. You may now disconnect your lines.