National Aluminum Company (Nalco) has planned Rs 700 crore capital expenditure in Dec-2011 for expansion of refinery in Orissa and setting up a nuclear power project in Gujarat.
At present, the company has refinery capacity of 15.75 lakh tonnes per annum and plans to take the capacity to 21 lakh tonnes per annum in a couple of months, BL Bagra, CMD at Nalco, said.
“The expansion of the refinery would help the company in its volume growth,” an analyst at Anand Rathi Securities said, adding that the refinery expansion has been delayed by more than six months due to shortage of equipment.
Nalco fell about 100,000 tonnes short of its production target of 1.68 mt of alumina in Nov-2011 due to the delay in refinery, the analyst said. The nuclear power project is at the initial stage and would take couple of years to be completed, Bagra said.
The company plans to set up a nuclear power plant pf 1,400 mw in Gujarat in association with NPCIL with gross investment of Rs 12,600 crore.
Nalco at present operates 1,200-mw coal based power unit at its existing aluminium operations in Orissa.
“Some initial capital expenditure for the nuclear power plant will be done this year while the rest would be done next year for the nuclear power plant,” the analyst with Anand Rathi said.
“Nalco is a debt-free company and we have cash balance of Rs 5,000 crore. So there is no need to raise funds for the expansion,” he said.
On aluminium prices, Bagra said it will remain range-bound and there may not be much fluctuation in aluminium prices in the domestic market.
Bagra expects demand growth of around 15 per cent in the domestic market, while from the overseas market he expects demand growth of around 4-5 per cent. In India, demand will be driven by mainly sectors such as power transmission and construction, he said adding that the company expects net profit of around Rs 1,000 crore in Dec-2011.
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