Good morning, everyone. On behalf of Systematix Group, we welcome you to the 1Q FY 2026 earnings conference call of NALCO Limited. We are joined today by Shri Brijendra Pratap Singh, CMD and Director, Commercial, and other functional directors of the company, along with Mr. Bharat Sahu, Company Secretary. Discuss the company's financial and operational performance for the first quarter of FY26. I would like to thank the management for giving us an opportunity to host this call. At the end of the presentation, we will open the floor for questions, and participants can raise their hands if they wish to ask a question. Now, I request Mr. Bharat Sahu for his opening remarks and introduction of the management team. Over to you, sir.
Thank you, ma'am. Greetings from National Aluminium Company Limited to all our esteemed investors. We had a board meeting yesterday to consider and approve the Q1 2025-2026 results. The result is already out, and thank you, Systematix Group, for arranging and hosting this post-earnings conference call. Before we start, let me have the privilege of introducing our management team, the functional directors. Anti-clockwise, sitting extreme is Shri Srimanta Panda, our ED Finance. Sitting next to him is our Shri Abhay Kumar Behuria, Director Finance. Next to him is Shri Jagdish Arora, Director of Projects and Technical. Sitting in the middle is our CMD and Director Commercial, Additional Charge, Shri Brijendra Pratap Singh, sir. Sitting next to him is Sri Pankaj Kumar Sharma, Director Production. And sitting just next to me is our Director HR, Dr. Tapas Kumar Pattanayak.
Before taking any further time, first, we'll have a brief presentation about the Q1 results, and then we'll invite our esteemed participants to come forward with their questions. Now, I'll request my colleague, Mr. Subrat Purohit, to have the presentation, please.
Thank you, sir. Good morning to all. Welcome you all to this earnings conference call for quarter one. The results of Q1 have been published yesterday, and it's another quarter of strong results shown by the company. Now, we'll go through the presentation. The agenda of the presentation is similar to the earlier presentation. We'll look at the company web page. Then we'll go to the physical performance, the financial highlights. Then we'll touch upon a little bit on the industry outlook, and we'll see our business highlights of the company and the year's performance of the company as well. NALCO. We can first appreciate the government of India holding in 51.28%. It is related to bauxite, aluminum, power, and coal complex in the country. It is global leader in producing bauxite and alumina at the lowest cost.
We are the lowest cost producer since about seven to eight years. We have been continuously rated as the lowest cost producer in bauxite and alumina. Our assets, bauxite assets are at Panchpatmali and refining assets are at Damanjodi. It's 7.5 million we are producing right now, bauxite, as per the requirement of our refinery. Our refinery capacity is currently 2.1 million. Our smelter and CPP assets are at Angul, again in the state of Odisha. We have also recently started operating our Utkal D and E coal mines in January of 2025. Our combined capacity of 4 million tons started. We have a dedicated facility at Vizag Port for export of alumina and also import of metal and import of products. We are also having four wind farm plants of total 198 MW capacity at Rajasthan, Maharashtra, and other places.
Now, coming to our physical performance in quarter one, we have been operating at almost about 100% capacity, but still we are improving our productivity and still registering higher production quarter by quarter. So if you see, in case of bauxite, we have achieved 6.6% growth against corresponding quarter last year. In case of alumina hydrate, there has been a significant jump of 35% against quarter one due to a base effect. Then in case of metal, we have achieved 3% growth and power also 6% growth. If you come to sales also, in sales also, in case of alumina, we have achieved a significant jump. This is partly due to base effect as Q1 sales were a bit less. And in case of metal, also we have achieved growth of 9%.
Here I would like to mention also that in case of domestic sales of metal and alumina, in both cases, we have achieved high stable sales for quarter one of any particular year, and if you see the run rate also, we are exceeding our past year's productions, so in case of alumina, we are running at a run rate of around 23 lakh tons. Aluminum, we are running at 4.6-4.7 lakh tons, and bauxite also around 76 lakh tons. Now, coming to the financial performance, in the last quarter, the Q4 of 2024-2025, it was a record-breaking performance of the company. The last quarter and the last financial year as well. In Q1 also, the company has shown very strong performance in its results.
We can see there is growth of 33% in the revenue, and also the PAT has registered growth of 77% against the corresponding quarter of last year. The company has also declared dividends of INR 2.5 per share in its latest board meeting. Now, coming to the industry outlook, the LME price is still steep. There was a downfall in April 25 when LME price fell down to INR 2,380 per ton because of the tariff announcements by the U.S. president. Since then, the LME price has recovered, and it has reached about $2,560 right now. The LME price going ahead are likely to be impacted by the tariff developments are still uncertain. Though the 90-day period has elapsed, but still there are lots of negotiations to go, and the tariff rates are far from over.
The developments, the LME price also will depend on the latest developments on the tariff announcements of the U.S. Then there are new starts in alumina refining and smelting capacities, primarily in Indonesia and India. Then, of course, there is rising oil prices and increase in U.S. dollar index recently. The LME price normally moves inversely with the rising oil prices and with the rising dollar index, actually. The LME price moves inversely. The LME prices will be impacted, and there are disruptions in the bauxite supply also. Guinea has canceled some licenses recently for bauxite mining. In Ghana, also there is one lease where the license was canceled. Depending on developments in these sectors, the LME price will also be impacted. Now, coming to the global GDP growth, in earlier outlook, in April 2025, IMF has projected 2.8% growth.
But this time, in July 2025, the tariff-related development has settled a bit as per IMF, and they have projected a growth of 3%, which bodes well for the aluminum sector as well because aluminum consumption is almost proportional to the growth of the country as well as the globe. So you can see in July 2025, the IMF has projected that there will be 3% growth in the year 2025 and 3.1% growth for the year 2026. Coming to the alumina scenario, the alumina supply was a bit on the downside last year, but the supply has improved recently. And we can see the difference between production and consumption. It is coming a little bit on the surplus side. The alumina prices are also moving accordingly. Coming to the aluminum sector, in the aluminum sector, there is growth.
There is a little bit of deficit on the, if you see the quarter-on-quarter basis and on the year-on-year estimation for the annual also, there are a little bit of deficit sides. So the aluminum sector is also a bit dependent on the latest capacity additions. We all know that the capacity in China is capped at 45 million tons currently. So currently, China is almost about reaching the 43 million tons-44 million tons. So the supply side will be limited to that. So in the issue of this year and the next future years, the LME prices are likely to stay strong. Now, if you look at the domestic scenario, the domestic, our country is still registering as still the fastest growing economy in the world. Recently, RBI has said that for this year, we are projecting at 6.5% growth. For the next year, 6.7% growth.
The country is aiming to be the biggest part of the year 2047, so to reach a 30 trillion economy by 2047, the growth rate needs to be more than 7%, which again bodes well for the aluminum industry in the country. If we see the aluminum consumption pattern, currently the electrical sector is having the largest jump in the aluminum consumption. It is having around 48% share, and transportation and building and construction sector comes next, so as the country's GDP growth rises, there will be definitely growth in this sector, and recently, our Ministry of Mines has published a detailed document of aluminum where they have predicted the aluminum consumption will be about 8.5 million tons by 2030. So there is lots of scope for improvement of demand in the country, and if you see the Indian aluminum scenario also, the growth rate is around 9%.
The aluminum consumption growth is around 9%. And also there is growth in the product sector. So the sector is a booming sector in the country. And the primary producers are also adding capacities to their plants. So this is going ahead well in the future. If we come back to NALCO, NALCO strategy is it's an integrated operation. We are integrated with our bauxite mines, our alumina refining capacity, our power plant. Then also we are adding our own captive coal blocks. The company is a zero-debt company, which gives leverage to fund our upcoming projects, our smelter and power projects, which will require a huge investment. So the zero-debt position will help the company in good funding. We are also adding raw material security in case of caustic soda. We are having a JV company with GACL, which is supplying caustic soda to the company.
Then our refinery capacity is going ahead. The smelter capacity also is on the pre-clearance stages at the moment. If you see our extension plans currently going ahead, the bauxite mines we are currently running at 7.5 million tons. And we have already signed the lease deed for Pottangi bauxite mines, which will be operated by this year end or by quarter one of next year. So our capacity will increase by 3.5 million tons. Then we are going ahead with our fifth stream refinery extension, which will increase the capacity by one million tons. The mechanical completion is targeted by this year's end, this financial year end. And the execution is currently on fast track mode. We have achieved around 74%-75% physical progress in this refinery expansion.
For aluminum smelter and captive coal plant, these are at the pre-clearance stages and the plants are likely to become by financial year 2030. Now coming to the environment part, the company is recognized for its works in the environment management. Our bauxite mines are rated as 5-star mines recently. We are operating two bauxite mines, Central and North Block and South Block at Panchpatmali Mine. Both these bauxite mines have been recently rated as 5-star ratings. We are putting equal emphasis on plantation, recirculation, advanced pollution control measures, and biodiversity protections. We are also certified with all the international management certifications like ISO 14001, ISO 50001, ISO 9001, and the like. We are operating already. I have told that we are operating 198 megawatts wind power plant. We are also utilizing our rooftop solar plants.
Currently, the capacity is 1,020 kW power, and we have planned to add 7 MW rooftop solar in the future. We are also equally responsible to the society we are working in. We have identified important sectors where we are working. The company is working at Damanjodi and Angul. Damanjodi is one of the most tribal resided populations. So we are focusing on education where we have some CSR schemes like Indradhanush, where we are sponsoring students, tribal students mostly to reputed residential schools. We have also a scheme of Nalco Ki Ladli, which is in line with the Government of India's Beti Bachao Beti Padhao movement. We are providing financial assistance to the girls of BPL families. In case of healthcare, we are assisting mobile healthcare units.
Eight numbers of mobile health units are in operation currently at Angul and Damanjodi and also Pottangi, where we are serving people of 250 peripheral villages. And we are serving more than 1 lakh patients annually. Also, we are operating one OPD facility at Angul, where we are serving 18,000 patients annually. For women's empowerment, we are helping self-help groups like Sakha Foundation for their livelihood support. Then there are lots of works on peripheral development, sanitation. Also, we have adopted the Puri Jagannath Temple and surrounding areas development works. So these are all the areas where we are working as per our social efforts. For corporate governance, the company is the Government of India company. So we are maintaining all our statutory requirements. There are 10 board-level committees. We are having 17 core policies and guidelines.
We have been rated as very good in financial year 2024-2025. Also, we have been recognized for our fair treatment to investors, our dividend policies, and transparency in our reporting. So thank you all. My presentation is over now. Thank you.
Yes, ma'am, we have already made a brief presentation on the Q1 as well as the different activities of the company. Now, we may allow our esteemed participants to come forward with their questions to the management, please.
Thank you, sir. We now open the floor for questions. Anybody who wishes to ask a question can indicate that by raising the hand icon button. So till then, I will proceed with a couple of questions from my side. First question would be the status of the alumina refinery and what is the status, what is the progress, and when are we now expecting the commissioning to happen? And post that, what is likely the ramp-up plan and what can be the expected volumes post-commissioning in FY 2027 and FY 2028?
As far as refinery is concerned, first of all, a very good morning to all. To you and everyone connected here, very good morning to all and congratulations to all for the wonderful performance of NALCO in Q1. As far as your question is concerned for Fifth Stream refinery expansion, whatever commitment we have given earlier that we will be starting the commissioning, all mechanical jobs will be completed maybe by March, and we will try to start all commissioning thing after that and try to start the production by June 26.
That is the commitment we have given earlier also. And we stand by it. The progress in the site is good. All the packages are working well. So when this refinery comes, maybe we start the commissioning and production in June 2026. So next financial year, we are hoping we will be producing at least 50% of the total capacity because initially the production will be less, maybe around 5 lakh- 6 lakhs. There's a 10 lakh capacity line. We'll be producing around 5 lakhs next year, next financial year, that is 2026-2027. After that, it will go to the rated capacity of 10 lakhs.
And sir, what is the number that you can see from the existing alumina like you were earlier? We are seeing growth in alumina sales. So from the existing one, what kind of capacity utilization are you expecting on the existing capacity?
Existing capacity, almost we are over-utilizing. Our production capacity of alumina is 22.5 lahks around, around 22 lakhs or 22.5 lakhs. This year, we are planning to do more than that. Maybe 23 lakhs we will be doing. So we will be doing 100% of the rated capacity of the existing line. More than 100%.
Understood, sir. Thank you. We'll take your questions now. We have first question from Amit Murarka from Axis. Amit, please go ahead with your question.
Yeah, hi. Thanks for hosting the call and the opportunity to ask the question. So on alumina, generally, we have been reading that the U.S., Russia are engaging for de-escalation of the current situation in Ukraine, and that could prompt the removal of the export kind of restrictions on Russian alumina. So how do you read the situation? What's your expectation of Russian alumina coming back to the market? Because I believe that could kind of create maybe an over-supply situation. So just wanted some view on that.
As far as Russian, you are talking about Russian alumina or aluminum?
Yeah, like alumina as well. So both rather, but yeah, like.
I don't think Russia may be excess of alumina is there. Of course, aluminum is there. Aluminum, which they were sending to Europe. Europe has already imposed sanctions on Russia. So Russian aluminum is not able to go into the European market. And with the Indian Prime Minister signing a free trade agreement with the UK, a lot of opportunities are there with Indian aluminum industries to go into the UK market. Because the UK market is again a market where there is a lot of potential for increase in EVs, solar panels, and other where usage of aluminum will be there. So that will be a boost for the Indian aluminum industry as far as the U.K. is concerned.
As far as U.S. tariffs are concerned, again, that is a concern area. U.S. tariff increased to around 50% from 25%. But our aluminum, which is especially from NALCO, we are not exporting any of the aluminum as of now. We are most, all aluminum is getting consumed in the domestic market. So NALCO will not be affected by that. Of course, Vedanta was exporting aluminum to USA. So that may come down if the tariffs are going to remain at the 50% level. But still, the demand is there in the U.S. also. So they might go in taking aluminum with the higher prices also.
Got it. So specifically on Russian supplies, how much supply would have been impacted of aluminum, let's say, if you have any number in your mind?
Russian supply of aluminum to the global market. I don't think I have the figure right now. We'll have to check what amount of aluminum Russia is exporting.
What he is asking is alumina. Alumina, Russia does not supply alumina.
Aluminum. He wants to know how much aluminum Russia is exporting. So aluminum, they have around 1.5 million tons, 1.3 million tons. Total 4 million tons. They were not producing it. They have reduced it to just 500,000 tons they had curtailed. They are not the lowest cost producers. The lowest cost producers are EGA or this Emirates Global Aluminium and Bahrain. They will be the first sufferers. This aluminum trade, anything which is coming down from America, they are the most supplier to America. They were supplying 100% to America. So they will be the first sufferers. Bahrain and EGA. This is Dubai-based company.
Got it. And then secondly, on the coal supplies of your captive coal mining, I think you mentioned that the 4 million tons has started. So how much would you have produced in Q1 for the captive mines?
Q1, almost at the rated capacity we are producing. As far as our targets are there. And this year we'll be doing around 4 million tons will be completing. Okay. So during monsoon, then you don't anticipate any issue around with coal supplies, right? I think earlier in earlier years, you have seen some.
No, no. That is not there. That is not there. No supply disruptions are there. We have a sufficient stock of coal in our power plants. And in mines also. Mines also, we are having sufficient stocks. During monsoon, some interruptions in the production is there. Mines production is there. But the dispatches, the transportation from mines to our power plant, that is going as per requirement. Because we have sufficient stock in the mines.
Sure. Thank you so much. I will come back later in the Q&A. Okay. Thank you.
Thank you. We'll take the next question from Karthikeyan. Karthikeyan, please unmute yourself and go ahead with your questions.
Hi. Am I audible?
Yes, you're audible.
Thank you for the opportunity. So I actually missed a couple of points from the starting. So I just wanted to understand what are the timelines for the new bauxite and alumina bauxite mine and the alumina refinery. And what's the cost of production in the alumina refinery we are expecting?
As far as bauxite mines is concerned, we are planning to already tender is out for MDO, and we are planning to start the mines somewhere maybe February, March. Latest by June, we are planning, but we are early with our all dates. Maybe latest by May, June, we'll be starting the bauxite mines, Pottangi mines. And alumina refinery fifth stream, as I already said, we are planning to start the commercial production from maybe June 26 onwards. As far as cost is concerned, cost of the alumina produced in this new, our new fifth stream refinery expansion, that will be almost similar to the cost which we are producing now. Because, of course, interest is not there. We have not taken any loan for that. Depreciation will be loaded. But that will be made offset by the technology.
In this, the technology is a better technology where the cost of soda consumption will be on the lower side. Manpower will be on the lower side. Overall manpower, because here in a single line, we will be producing around 10 lakh tons. Now, with four lines at present, we are producing 20 lakh tons. So that advantage of the volume we'll be getting with a lesser manpower because manpower is the most costly thing, which is our fixed cost as far as fixed cost is concerned. So cost will be almost similar kind of as far as what we are incurring now, as far as alumina is concerned.
Okay. And just, sir, I wanted to know what was the alumina realization for this quarter?
Alumina realization for this quarter was around $35,000. It was around $400.
$416 average.
Okay, sir. And sir, just another question. What drove the other expenses for this quarter as the other expenses were quite high? So I just wanted to understand.
Other expenses, of course, what you are telling is INR 707 crore is on the higher side. This may, I think, RPO obligation is on the higher side, no? We can just deliberate on that. RPO, my director of production, or maybe my ED finance. We had some RPO obligations as far as renewable power is concerned. It cost us around INR 70- INR 75 crore. That was the additional cost which we paid. Because the norms, government norms has changed. We have to have 30%, 30% of.
Basically, our project is basically so we are having our RPO obligation of around 3% of our electricity consumption. Now, due to the Ministry of Power guidelines for year 2024-2025, we are bound to have obligation of around 29.4% for the year 2024-2025 and 33% for the year 2025-2026. So in that connection, we have purchased this REC for around INR 75 crore for the year 2024-2025. That has increased the cost.
And some orbital program for something. INR 70 crore was that. 75 crore. And what is the other?
There is an increase in repair and maintenance and the whole captive coal, which was INR 7.2 lakh earlier. Now, this quarter, it is INR 9.89 lakh. So in our presentation of accounts, the transportation of coal is captured in the other expenses, not in power and coal. So that also has added to around INR 10 crore-INR 12 crore. So these are the major things and a little bit in CSR expenses and RPO obligation. Then general administrative expenses increased by around INR 8 crore.
No, that is in interest rate of coal financing.
And due to higher volume movement of alumina from refinery to smelter, there is an increase in transportation cost also. And higher export of alumina also. That has increased selling distribution expenses.
Okay. Okay. Thank you. Thank you so much. Thank you.
And INR 12 crore is in INR 12 crore. And because there was a little estimation change in last accounting.
Thank you. We'll take our next question from Aditya Welekar. Please go ahead.
Yeah. Thank you. Am I audible? Yes, you're audible, Aditya. Please go ahead. Yeah. So just on the fifth stream of alumina refinery, sir, what kind of means in the last call you have guided on volumes of 500,000 tons from that in FY 2027? So we are keeping that guidance unchanged, correct?
Yes, yes. In FY 2027, we will be aiming for five lakh tons from that. Because if we are able to start in June, that much volume we will be getting. Yeah, nine months. Nine months will be there. It is a 10 lakh capacity. Three quarters, minimum five lakh we should go.
Just related to that, so once the plant stabilizes, what kind of utilization can we expect post the full ramp-up?
Utilization, actually, initially, if we start in June, initially some utilization will be on the lower side. But slowly, maybe within the next six months, we'll be trying to take it to the rated capacity of 10 lakh tons. It will take maybe three, four, five, six months. But since it is only a chemical plant, chemical process plant, so it will not take a lot of time. That's why we are taking five lakh tons for financial year 2027.
Understood, sir. Just on a few numbers, in the last call, we have given alumina sales volume guidance of 12.8 lakh tons, out of which 12.3 are exports. So those numbers are also unchanged, right?
This year, you are talking for this year, no?
Yeah, 2026, FY 2026.
This year, that will increase. Our exports will increase. Whatever we have done last year, last year we have done around kind of shipment, if you talk in terms of shipment, 36 shipments. This year, we are planning for maybe 41 or 42 shipments. That will increase by maybe 5 shipments. The 5 shipments are around 1 lakh tons or 1.5 lakh tons.
So what will be?
Because we are increasing the volume. Overall production volume will increase.
What will be that, sir? Total production volume guidance for this year and last year?
Last year, we have done calcined alumina around 20.7 lakh tons. It was around 20.7 lakh tons. This year, we have planned for 22.5 lakh tons. But we are aiming we will be achieving around 23 lakh tons. Maybe around 2 lakh tons or 2.5 lakh tons more of production will be there. So in domestic market, we are also increasing our presence. Last year, we have sold around 40,000 in the domestic market. This year, we are planning we will be selling around maybe 1 lakh or 120,000 lakh in the domestic market. And the rest will go to the exports. So exports maybe around 1 lakh or 150,000 lakh will increase.
Okay. So total sales volume will be 12.8 lakhs?
Huh? It will be around more than 12.5 lakhs. 12.5 lakhs or 12.8 lakhs.
Understood. Sir, my last question is on that brownfield smelter of 0.5 million ton. Any progress on the DPR in the last call? We said that we can file a revised DPR.
As far as Brownfield expansion of smelter is concerned, already DPR preparation activities we have started. For DPR preparation, we have to have a consultant. Already appointment of consultant, we are going ahead with that. Within maybe next two months or three months, we'll be having consultant two, three months. He will be there for preparing the DPR. We are planning next maybe seven, eight months, we will be ready with the DPR to take it to the board for the approval. That is the timeline? Yeah. Our Director Project is here. He will further clarify. For this month or this financial year, we'll complete all the DPR preparation and all the activities.
One good thing is that land acquisition, which was held up, that has taken shape. We have completed all the formalities of land acquisition. Now the final stage of land acquisition is taking place, which we'll be completing in another four to six months. By this time, all the preparation would be ready. Next financial year, we'll start the tendering process and onboarding the parties.
Understood, sir. Thanks a lot. I'll get back in the field.
Thank you.
Thank you. We'll take the next question from Shrikant. Please go ahead.
Yeah. Hi, everyone. Can you hear me? Yes, you can hear me. Yeah. Yeah. Hi. Hi. This is Shrikant from HSBC. Thanks for the opportunity to ask questions. Three questions for the time being. I'd like to take them one by one. So first one is, how much of alumina sales in this quarter were on a spot basis and how much were under long-term contracts?
Whatever we have sold in export market, every month, one shipment is going for long-term and the rest is going on spot. On an average, four shipments per month we are doing exports.
Okay. Understood. My second question is on pricing. So for long-term contracts, how is pricing determined? Is it linked to LME aluminum prices?
Yes. It is linked to the LME prices. In that, some percentage is decided. On that percentage, it is decided. We do a tender. And on that tender basis, whoever the tender is going, giving the maximum percentage on the LME, that is order is given on that.
Okay. That's very clear. And third, what is management's outlook for alumina and aluminum cost of production? Can you just remind us about the cost of production in Q1?
INR 20,000. As far as cost of production is concerned, I will request my director.
So far, the cost of production of alumina is concerned. Our cost of production is varying around INR 20,000 to INR 21,000. It's the total cost. So far, the cost of production of alumina is concerned. Our cost of production is varying between INR 20,000 to INR 21,000. And out of that, 60% is our variable cost and the balance is fixed.
Okay. What's the outlook for this year?
Pardon?
What is the outlook for this year?
It will be almost the same. It will be similar kind.
Similar kind. Because of our techno-economic performance is very good, we expect a reduction in our cost because our performance parameter has improved well. The key consumables, caustics, soda, other parameters, we have a great control over that. So we expect that our cost will come down at the end of the year.
Okay. This was very helpful. I've got a couple more questions, but I'll come back later. Thank you.
Thank you.
Thank you. We'll take the next question from Saket Kapoor. Saket, please unmute yourself and go ahead.
Thank you for the opportunity. I hope I can hear you.
Your voice is a little distant. Can you come closer to the mic?
Yeah, yeah, yeah. Now, am I audible, sir?
Yes, it's perfect. Yes, yes.
Namaskar. Namaskar to the entire team. And thank you for the elaborate discussion we are having, sir. And we hope for the continuity. Sir, on the value-added product, if you could just show some light, what is our roadmap going ahead? And how will value-added sales contribute? I think some investment in the Angul Park was also envisaged earlier. So where are we? What are we going to invest? When are we going to see value-added contributing to the top line and bottom line? If you could just give us the roadmap.
As far as value-added product is concerned, our focus now is increasing the production of wire rods. Because wire rod, we are producing only around 1 lakh tons per year yearly. So we are trying to get one new wire rod mill so that whatever ingots we are selling in the market, that we will be able to convert into wire rods. That is one target we are taking. Already, DPR has been made earlier for that. We are revising the cost estimate and going in for tendering. So the whole activity may take around two years for the mill to come.
Next is the foil sector, the aluminum foil. In that area also, we are trying to have some kind of presence where we are going in for appointing one consultant who will be suggesting us what kind of foils to be made, what will be the market, and all that. A very small investment is required in that. Maybe around INR 150-200 crore of investment is required. These are the two areas as far as aluminum is metal is concerned where we are targeting next two years or three years, two and a half years, we should have presence, increasing our wire rods and foil segment from our roll product units. Even roll product units, we are going to have an annealing furnace which is coming in March. Roll product units, on an average, we are producing 2,000 tons per month.
That will increase to 3,000 tons per month from March onwards. That area also will give more value-added products from roll product units. As far as alumina is concerned, there are the two areas as is special grade alumina, fused alumina. These are the areas where value-added we can make. We are exploring the market for that. What kind of market is there? The market is there for that. We'll be going in for maybe some kind of conversion or setting up our own units. That is also in our mind how to go in for that.
So how much have we outlined for this? Firstly, the wire rod part, two years timeline which you have said, how much we will be spending on the same? And what would be its revenue contribution, sir, as of today's market prices?
As far as wire rods is concerned, we get a premium of around INR 10,000 in wire rods. If you see the contribution, the contribution difference is around maybe INR 5,000-INR 6,000 because of conversion. We take the conversion cost into account. Rolled products we see, we get a premium of around INR 30,000-INR 35,000 in the range of depending on the product. But contribution, again, there is, I think contribution must be around kinda how the contribution must be around INR 6,000-INR 7,000 contribution as far as rolled product is concerned. So contribution is there in both rolled product and wire rods. More importantly is that because if you are selling ingots, we are heavily dependent on the LME.
If you want to insulate ourselves from the LME, the fluctuations of the LME, and get the premium in the market, it is very important that we go in for increasing the volumes of wire rods, rolled products, and also going into the foil markets. Foil market, again, has a very good contribution margin.
My question was, what is the CapEx we are doing for the wire rod segment for aluminum foil? You mentioned once before.
As far as CapEx of the wire rod mill is concerned, it is around in between INR 200-300 crore for a capacity of 1 lakh ton mill. For setting a foil plant, again, it is a very low CapEx plant, around maybe INR 50 crores or 60 crores for a maybe 1,000 ton monthly capacity plant. Depends on the capacity what we are setting. So wire rod will cost around maybe INR 250-300 crores. That is the CapEx as far as wire rod is concerned.
And last point, sir, on the alumina realization. So what are the current spot market realizations? And for this quarter and the ensuing quarter, at what prices have we contracted our shipment? If you could just give some color on that.
As far as current spot prices are concerned, that is averaging around $400. This first quarter was we got around $416 was the average because some last quarter which balance quarter shipment. That order was of the higher vol rate. But whatever spot prices currently we are getting is somewhere around $400. And we are expecting that in the coming quarters also that will remain somewhere in between $400-$450.
Right, sir. Thank you, sir. I will join the queue. And all the best to the team.
Thank you. Thank you.
Thank you. We'll take the next question from Pallav Agarwal. Pallav, please go ahead.
Yeah. Good morning, sir. So I had a question on how the aluminum physical premiums have been moving. So is it more linked with MJP or since we sell a majority of our products in the domestic market, so we should be probably commanding a better premium compared to our peers?
You're talking about the premiums in the metal sector, no?
Yeah.
That I was telling earlier also as far as premium is concerned, in wire rods, we get a premium from our ingot around INR 10,000. And our conversion cost, if you see, is around, I think, INR 3,500-INR 4,000. So, additional benefit of around maybe INR 6,000 or INR 7,000 we get in wire rods as far as wire rod is concerned, depending on the quality and grade of the wire rods we are producing. As far as roll product is concerned, roll product, we get a premium of around in between INR 30,000-INR 35,000 extra premium. But of course, conversion cost is also there. So if you see margins, actual margins after conversion cost, it will come around maybe INR 5,000-INR 10,000 in between, depending again on the product we are talking about, sizes and all that.
If you're going in the more lower sizes, 0.3 mm-0.5 mm the premium is on the higher side. But our productivity goes down. If you are producing on the thinner side, the productivity goes down and the volume comes down. We have to balance in that.
Yes, sir. We also see competitors also trying to push more material in the domestic market. So is there enough demand to absorb that so physical premiums can sustain at these levels?
Domestic market, what we are seeing in the consumption pattern of the aluminum in the domestic market, around 45%-50% is going into the power sector. Now, the kind of infrastructure development, the kind of power lines, grid lines, and government thrust in the electrification is there. The demand will be there as far as power sector is concerned. Now, solar panels, a lot of solar panels are there. Again, extrusion demand is there in solar panels. A lot of solar panels are coming. EVs, electric vehicles. Again, in EVs, a lot of usage of aluminum being lightweight, replacing the steel.
So all these areas, infrastructure, other areas, infrastructure development also, a lot of the demand in the domestic market is still there. Because we are seeing the domestic GDP growth is around maybe 5%-6% growth GDP, which is projected. And the aluminium, as far as whatever historically we see, aluminium requirement is around 1.5% of the GDP. It is almost there. It grows like that. So aluminium requirement will grow at the end of maybe 7%-8% or 9%.
Yes, sir. Lastly, you mentioned that we incurred almost INR 75 crore in RPO obligations. So are we planning on putting up captive solar or maybe increasing the wind power capacity so that we don't have to purchase, we can reduce the external RPO purchase?
Yes, of course, we have to do that. We are going in for appointing a consultant in a very planned manner. Already, 7 MW solar power is under our tendering stage. That will come within next one year or one and a half years. But that is a small quantity. Wind power is an area where we have to see or maybe setting up in hybrid mode, wind and solar both. We are exploring on that. Maybe our plan is by 2030, next four, five years, we will have to have more of at least 15%-20% of green power into our portfolio. Yes, yes. Our Director Projects will supplement.
This is a very good question. And going forward, everybody, and we are working on it in different format. And very soon, we'll have a fixed plan that how much green would be coming. As our CMD sir has told, this 10 MW of solar will come in one year. Another 10 MW of our wind power will come in one or two months. Because in Kayathar, it is ready. Now it is being getting clearances. Maybe from September or October, we'll be having 10 MW of additional plant. We are working on a hybrid round-the-clock combination of solar, wind, and battery storage. We are working on all this with all the producers, power producers. In another three, four months' time, we will be fixing up our roadmap for the next few years.
Sure, sir. Also, sir, I mean, with the captive coal now at four million tons, is there any incremental cost savings that can come in or most of the benefits are now already in the P&L?
Yes, definitely, there is a saving. Because what we are taking coal from MCL on full supply agreement and our own products, and there is a difference of around INR 400, you are getting advantages. And transportation cost also. Because our mine is very proximate to our CPP. So that advantage we are also getting. Both of you are getting advantage in our in-house coal supply that is from our own mines. Okay?
Okay, sir. Thank you.
Thank you. I think the next question from Manav Gogia will be up. Please go ahead.
Yes. Hi. Very good morning. And thank you for the opportunity. Good morning. Good morning. Sir, you had mentioned the cost of production of alumina at INR 20,000-INR 21,000 per ton. Can you provide the same for the aluminum segment as well?
Aluminum, our cost is around INR 150,000, INR 155,000-INR 160,000. It is varying within that range only. The aluminum product. Because that depends upon our product basket. I am talking about the average cost of metal. The more we go for roll product, the cost may vary. But the range is within INR 155,000-INR 160,000. INR 150,000. INR 155,000. INR 155,000.
Sure. Sure, sir. Got it. Also, one question, if you could provide the number for the landed cost of the caustic soda for the quarter.
Last quarter, the landed cost was INR 41,000 something. Caustic soda landed cost was INR 44,000 something. INR 44,000+ . It has increased slightly. It has increased from the previous quarter, no? INR 41,000. INR 44,000. INR 41,000. You see the landed cost of caustic soda in, if you see quarter one, 2024, 2025, it was INR 36,300. This quarter, this year, 2025, 2026, it is INR 44,301. So it has increased if you compare Q1 last year. If you compare Q4 last quarter, say if you compare, then that cost has gone up. From Q4 it has slightly increased. I think INR 3,000. INR 41,000 average cost. Q4, Q1. Against INR 41,000. Better also. So it increases there.
Sure, sir.
INR 44,000 is the price which we are getting now.
Got it, sir. Got it. Thank you so much. That's all from my end. And all the very best.
Thank you.
Thank you. We'll take the next question from Shrikant. Please go ahead.
Yeah. Thanks again for the opportunity. Three more questions from my side. So first is, what is our total coal requirement and how much of this still needs to be purchased externally?
Total coal requirement is around 7.2 million tons. So we will be producing around four from our internal. Three to 3.2 million tons will be taking from Coal India. MCL.
Understood. Very helpful. Second is regarding our bauxite mines. So when do the leases for the existing mines expire?
Our Director Production is there.
Basically, we are presently operating two mines. And the present validity is in 2029 and 2031. And we will initiate process for renewal also. So this is the situation.
Understood. And the last question is regarding long-term alumina contracts. So is it safe to assume that roughly 75% of alumina exports would be on spot and rest would be on long-term contracts? Is that understanding correct?
I think long-term will be on the lesser side. Because we had done one long-term tender, we did not get sufficient of. Price was not very good. So as of now, we are aiming to go more on the spot. Maybe it will be somewhere around 80% spot and 20% long-term.
This was very helpful. That's all from my side. Thank you.
Thank you.
Sure, sir.
A couple of questions from my side as well. So regarding the brownfield aluminum project where you said that DPR is currently ongoing, so have you identified a new technology partner since there were certain challenges with the previous partner?
The new technology supplier, we have already finalized it. And in another three, four months, last time I told the same thing, in three, four months' time, we'll onboard the new technology supplier.
So the DPR preparation, since you said it's ongoing, so that would be basis finalization of the technology supplier, right? Or is it something which happens after the technology supplier is identified?
I didn't get your question. Can you come again, please? Sure. Sure.
Sir, in the aluminum market, you mentioned.
See, DPR preparation. This technology supplier's input is required. So by the time we are fixing up who will be preparing our DPR, this technology supplier should be finalized and they'll be onboarded. We have almost finalized the things. Now we are doing the formalities. Being a PSU, we have to go through a process. Very soon, we'll be onboarding the technology supplier.
Understood. The next question was on the wind capacity that's commissioning, that you said 10 MW. I mean, what platform are we looking at and what is the rated capacity of these turbines? Are we looking at the latest turbines or are we looking at?
It was actually a very long project which went into NCLT. Now 10 MW, 1.5 MW is the capacity of each turbine. Six such turbines would start producing it. So we are getting clearances, all those clearances from MNRE and State of Tamil Nadu. In this month, we'll finalize this and then we'll start utilizing it. We'll see how is the best possibility of utilizing this.
Okay. Understood. Sir, I missed your I think a participant asked this question and missed a point. So could you just reiterate what is the export proportion of alumina sales? And do I stand correct in understanding that around 75% or 80% of your export sales are on the spot basis, right?
You want to know the volume of export sales as compared to domestic, ma'am?
Yes, yes. Alumina.
If you see this year, what I was telling, every month, maybe four shipments we are doing export. So that comes to around 120,000. In between, some months we are doing four shipments, some months five shipments also. Average 120. Domestic sale will be around monthly, if you see, monthly domestic sale will be around 20,000, in between 20,000-25,000. Maximum 20,000. So that will be around maybe 15%-20% of 15% of the total volume will be going into domestic market. Understood. And like 70%-80% of the export would be on spot basis? Yes. 40% on spot basis. Yes, yes. 80% is spot. Maybe 20% will be going on long-term.
Okay, sir. That's it from my side. I think we're done from all the participant questions as well. So I hand over to you to the management for any closing remarks. Then we can conclude the call.
Thank you, ma'am. Thank you all our esteemed participant analysts and our institutional investors for giving confidence on NALCO time and again and coming with your number with so many of questions giving insight to our production, our marketing activities, also about expansion diversification activities. We hope and expect the same kind of cooperation in future also. I just hand over the mic to our CMD sir just to close the investor call.
Once again, on behalf of everyone present here, all our directors, I would like to thank all the investors, analysts, and everyone connected through VC for going through NALCO results and giving confidence in NALCO. Whatever your queries, I hope we have explained them well. One thing which I would like to tell on behalf of our board that as far as NALCO is concerned, NALCO performance, we are trying to increase the volumes. We are trying to improve our techno economics. As far as market is concerned, every time market is not in our hand, the prices, the demands are not in our hand. What is in our hand is to increase the volume, maximize the production, and increase the techno so as to reduce the cost. That already we have taken very challenging target this year.
As compared to previous year, we have taken at least maybe 10% higher targets in all the areas. And as far as first quarter is concerned, we have achieved all those targets. We are very much sure we will be achieving those targets. So at the end of the year, the financials will be very good. What advantage we have? We have both upward and downward integration. Upward integration means we have our own bauxite mines where we are getting very good quality bauxite, sufficient quantity of bauxite. Now we are having our own coal mines from where at least maybe 60% of coal we are getting, which is again giving advantage to us. We are having JV with GACL for having caustic soda. That is again giving us security as far as caustic soda is concerned.
Our power plant, as far as power security is concerned, that is our own captive power plant where we produce the power at the rate of maybe INR 3- INR 3.5 or INR 3.10 rupees per unit. That again is giving advantage to us. So a lot of advantages as far as our total integration is concerned. Now we are going in for expansion mode. The refinery will come next year. Our target now is to expedite the expansion of smelter along with the power plant. That we are aiming to next three to four years should come so that whatever alumina we are producing, excess of alumina should be converted to aluminum. So after that, only this overall turnover of the company will go above 25,000 to become a Maharatna company.
That is our target. And with all the things going, we are hoping whatever we are planning will be able to do it. So thank you once again in having confidence in NALCO and sharing all your experiences with us. Thank you. Thank you very much.
Thank you, sir. Thank you for hosting the call. And thank you all the participants for joining in. We now conclude the call. Thank you.
Thank you. With this, we come to an end of this question. Thank you all.