NALCO was incorporated on 7th January 1981 as a wholly owned enterprise of Government of India for technical collaboration and financing of an integrated aluminium complex with Aluminium Pechiney of France. Company undertook major expansion of bauxite mine from 2.4 million TPA to 4.8 million TPA and alumina refinery from 8,00,000 TPA to 13,50,000 TPA in 1994. It also set up a Smelter plant at Angul with a capacity of 26000 TPY of strip casting facility. A special Alumina plant at Damanjodi was set up with a capacity of 20,000 TPY and 10,000 TPY for detergent grades Zeolite (Zeolite-A).

Company is the country's leading manufacturer, exporter of alumina and aluminium. Company also has a plant for extraction of gallium at its aluminium refinery complex at Damanjodi. Company had been allotted UTKAL-E coal block by the Government of India in the year 2006-2007, having a reserve of around 70 million MT, for its new units at the captive power plant. Major projects have been lined up in Andhra Pradesh in India, Indonesia, and Iran abroad. A memorandum of agreement has been signed with Bharat Earth Movers in April 2008 for production of aluminum rails and wagons, and subsequently, aluminum rail coaches and metro coaches. The company has firmly established itself as India's leading manufacturer and exporter of alumina and aluminum.

Products & Services:

Nalco is Asia's largest integrated aluminium complex, encompassing bauxite mining, alumina refining, aluminium smelting and casting, power generation, rail and port operations. Company has a leading presence in production and export of alumina and aluminium. In aluminium metal company manufactures ingots, sows, billets, wire rods, alloy wire rods, cast stripes etc. Company also manufactures aluminium hydrate, calcined alumina. Company also diversified its value added products range to special grade, alumina, Zeolite, aluminium cast wheel etc. Company has a stockyard at Bhiwandi in Thane district. Company has the ISO 14001 certification for environmental excellence. Company has tie up with National Research Development Corporation (NRDC) for manufacturing gallium with indigenous technology. Nalco has completely integrated all facilities including port facilities and a power station to improve its operating margin. The company also produces chemical grade specialty alumina and hydrates. Nalco is implementing a number of down-stream projects to manufacture value added items like special grade alumina, zeolite etc.

Recent developments:

National Aluminium Company is in discussions with Nuclear Power Corporation of India
(NPCIL) to jointly set up a Rs 120 billion nuclear power plant in south Orissa's Ganjam district. Nalco is likely to have a 50% stake in the project.

National Aluminium Company (Nalco) intends to scale up its annual business turnover to Rs 100 billion in the next five years. The company expects to achieve the projected turnover through massive expansion both within and outside the country and also by maximum utilization of its human resources. Company is likely to acquire mining zones at Gudem and KR Konda mining sites at Chintapalli near Visakhapatnam (Andhra Pradesh). In captive power generation , the company planning to scale up its generation capacity from 1080 Mw at present to 1200 Mw after its tenth unit of captive power plant (120 Mw) located at Angul is commissioned.

Valuation:

At current market price, stock is trading at 14.9 P/E multiple of its FY2011 estimated earnings par share. We recommend investors to buy "National Aluminium Company Limited" with long-term investment prospective.