X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Nalco: A peep into past-II - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Jul 17, 2008

    Nalco: A peep into past-II

    In last article, we have discussed the performance of the company between the period 1999 and 2003. Now let us see the performance of the company between the period 2003 and 2007. This was the period during which Nalco increased it presence in the domestic market.

    Let us see the performance of profit and loss account of company between the period 2003 and 2007.

    Topline: The topline of the company grew at a CAGR of 24% between 2003 and 2007. The revenues from exports grew at CAGR of 15% and from domestic markets at a CAGR of 33%. Exports contribution to the total revenue declined from 55% in FY03 to 40% in FY07. However the contribution from domestic markets jumped from 45% in FY03 to 60% in FY07. This was mainly on account of greater demand from domestic markets as compared to the international. Moreover, the consumption in the domestic market was growing at a higher rate than the world.

    If we were to go by the product wise breakup, the contribution of calcined alumina to total revenues decreased from 29% in FY03 to 22% In FY07. Although the volumes of calcined alumina decreased at a CAGR of 7%, the revenues from calcined alumina grew at a CAGR of 16%. This was mainly on account of higher realizations, which grew at a CAGR of 25%. This can be attributed to increased prices of alumina in international markets. Moreover the supply of alumina in world markets, which was surplus in FY04, had become deficit due to rising demand from China and other western countries.

    The contribution of aluminium ingots to total revenues jumped from 54% in FY03 to 75% in FY07. The revenues from it increased at a CAGR of 35% during the period under consideration. This was led by a growth in volumes at a CAGR of 16% and realizations at a CAGR of 16%. The growth in realizations can be owed to higher LME prices of aluminium during that period.

    Operating front: The operating profits of the company grew at a CAGR of 33% higher than the revenues growth. The operating profit margins increased from 41% in FY03 to 55% in FY07. The operating expenses showed a marginal growth compared to last period and stood at a CAGR of 14.6%. It should be noted that the company is self sufficient in key raw materials like Bauxite and Coal and hence, when other standalone players were witnessing a steep rise in raw material costs and hence, a possible contraction in margins, Nalco was able to expand the same significantly.

    Bottomline: The bottomline of the company grew at a CAGR of 46%, higher than operating profits. The net profit margins of the company jumped from 20% in FY03 to 40% in FY07. This can mainly be attributed to repayment of debts as the company reduced its interest outgo from Rs.1.2 bn in FY03 to nil in FY06. Moreover the depreciation was also reduced at a CAGR of 4%. However the tax outgo increased at a CAGR of 70%.

    To conclude, when the aluminium prices were rising, integrated players like Nalco benefited the most as captive mines and power units cushioned it against the rise in raw material costs. Furthermore, higher product prices enabled them to achieve a quantum jump in profits.

     

     

    Equitymaster requests your view! Post a comment on "Nalco: A peep into past-II". Click here!

      
     

    More Views on News

    Hindalco: Strong Performance at Operating Level (Quarterly Results Update - Detailed)

    Feb 22, 2017

    Hindalco Industries has reported a 14.5% YoY increase in the topline while the bottomline came at Rs 3.2 billion.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    NALCO SHARE PRICE


    Aug 18, 2017 (Close)

    TRACK NALCO

    NALCO - GRAUER & WEIL COMPARISON

    Compare Company With Charts

    COMPARE NALCO WITH

    MARKET STATS