NALCO’s Profit Puzzle: Strong Sales Amidst Declining Returns

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Navigating the High Seas: NALCO’s Profit Decline Amidst Strong Sales in FY23

National Aluminium Company Ltd (NALCO), one of India’s leading aluminium companies, has reported a decline in profits despite strong sales in the fiscal year 2022-23. The company’s sales amounted to Rs 14,171 crore, with a net profit of Rs 1,544 crore. During this period, NALCO achieved an export turnover of Rs 4,217 crore.

A Look Back: Record Sales and Profits

In contrast, the previous financial year 2021-22 saw NALCO achieving its highest-ever sales of Rs 14,181 crore and a record net profit of Rs 2,952 crore. These figures were revealed during the company’s 42nd annual general meeting held in virtual mode on Thursday, where the annual accounts for 2022-23 were approved.

The Challenges: Higher Input Costs and Volatility

Despite the growth on various fronts in FY 2022-23, NALCO’s profit margins have been affected due to higher input costs, business environment volatility, and global demand-supply dynamics. CMD Sridhar Patra highlighted these challenges while addressing shareholders at the AGM.

The Way Forward: Refinery Project and Bauxite Mines

Patra also emphasized the company’s current focus on the early completion of the 5th stream refinery project and the development of the Pottangi Bauxite Mines. These initiatives are expected to bolster NALCO’s position in the aluminium industry.

About NALCO

Based in Odisha, NALCO is one of the largest integrated aluminium producers in India. However, the company witnessed a 40 per cent decline in consolidated net profit to Rs 333.76 crore in the June quarter due to lower income, as compared to a net profit of Rs 557.91 crore in the same quarter of the previous year.

Conclusion

The fiscal year 2022-23 has been a mixed bag for NALCO with strong sales but declining profits. The company is navigating through challenging times with higher input costs and market volatility. However, with its focus on key projects and strategic initiatives, NALCO is poised to turn these challenges into opportunities for growth and sustainability.


Keywords : NALCO, Profits Decline, Strong Sales, Fiscal Year 2022-23, Higher Input Costs, Business Volatility, Demand-Supply Dynamics, 5th Stream Refinery Project, Pottangi Bauxite Mines

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