National Aluminium Company vs Hindalco Industries: Which Aluminium Stock Should You Invest In?

Company Overview of Hindalco Industries Ltd

Hindalco Industries Limited, an India-based leading metals company, is involved in the production and global distribution of aluminium, copper, and related products. The company operates in four main segments: Novelis, Aluminium Upstream, Aluminium Downstream, and Copper. Novelis focuses on manufacturing and selling aluminium sheet and light gauge products across North America, South America, Europe, and Asia. 

The company’s upstream activities include bauxite and coal mining, alumina refining, metal production, and power generation. Its downstream operations involve the production of value-added aluminium products like flat rolled items, extrusions, and foils.  

Company Overview of National Aluminium Company Ltd

National Aluminium Company Limited, based in India, primarily focuses on manufacturing and selling alumina and aluminum. The company consists of two main segments: Chemical and Aluminium. 

The Chemical segment produces calcined alumina, alumina hydrate, and related products, while the Aluminium segment manufactures aluminum ingots, wire rods, billets, strips, rolled products, and other related items. The company operates a 22.75 lakh tons per annum alumina refinery plant in Damanjodi, located in the Koraput district of Odisha, as well as a 4.60 TPA aluminum smelter in Angul, Odisha.  

The Stock Performance of Hindalco Industries

The table below displays the month-by-month stock performance of Hindalco Industries Ltd for the past year.

The Stock Performance of National Aluminium Company Ltd

The table below displays the month-by-month stock performance of National Aluminium Co Ltd for the past year.

Fundamental Analysis of Hindalco Industries Limited

Hindalco Industries Ltd is a leading player in the aluminum and copper manufacturing sector, operating under the Aditya Birla Group. Established in 1958, the company has evolved to become one of the largest producers of aluminum in Asia, with a diverse portfolio that includes the production of rolled products, extrusions, and sheets.    

The stock closed at ₹564.00 with a market capitalization of ₹126,134.27 crore. It has a dividend yield of 0.62% and a one-year return of -6.48%. The stock is 36.99% below its 52-week high, with a five-year CAGR of 39.29% and an average net profit margin of 4.38%.

• Close Price ( ₹ ): 564.00
• Market Cap ( Cr ): 126134.27
• Dividend Yield %: 0.62
• 1Y Return %: -6.48
• 6M Return %: -22.76
• 1M Return %: -18.71
• 5Y CAGR %: 39.29
• % Away From 52W High: 36.99
• 5Y Avg Net Profit Margin %: 4.38 

Fundamental Analysis of National Aluminium Company Limited

National Aluminium Company Limited, or National Aluminum Company Limited, is a public sector enterprise in India that specializes in the production of aluminum and its products. Established in 1981, the company operates its smelter plant in Odisha, leveraging the region’s bauxite reserves.  

The stock closed at ₹143.45 with a market capitalization of ₹26,346.48 crore. It has a dividend yield of 3.49% and has experienced a -21.48% return over the past year, a -32.56% return over six months, and a -26.53% return over one month. The five-year CAGR is 36.38%, and it is 83.33% off its 52-week high, with an average net profit margin of 12.10% over five years.

• Close Price ( ₹ ): 143.45
• Market Cap ( Cr ): 26346.48
• Dividend Yield %: 3.49
• 1Y Return %: -21.48
• 6M Return %: -32.56
• 1M Return %: -26.53
• 5Y CAGR %: 36.38
• % Away From 52W High: 83.33
• 5Y Avg Net Profit Margin %: 12.10 

Financial Comparison of Hindalco Industries and National Aluminium Company Ltd

The table below shows a financial comparison of Hindalco Industries Ltd and National Aluminium Co. Ltd.

Points to be noted:

• (TTM) Trailing 12 Months: Trailing 12 months (TTM) is used to describe the past 12 consecutive months of a company’s performance data when reporting financial figures.
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): Measures a company’s profitability before accounting for financial and non-cash expenses.
• PBIT (Profit Before Interest and Tax): Reflects operating profit by excluding interest and taxes from total revenue.
• PBT (Profit Before Tax): Indicates profit after deducting operating costs and interest but before taxes.
• Net Income: Represents the company’s total profit after all expenses, including taxes and interest, are deducted.
• EPS (Earnings Per Share): Shows the portion of a company’s profit allocated to each outstanding share of stock.
• DPS (Dividend Per Share): Reflects the total dividend paid out per share over a specific period.
• Payout Ratio: Measures the proportion of earnings distributed as dividends to shareholders. 

Dividend of Hindalco Industries and National Aluminium Company Ltd

Hindalco Industries and National Aluminium Company Ltd both offer attractive dividends, with Hindalco declaring ₹3.5 per share in May 2024 and National Aluminium paying ₹4 per share in February 2025. Both companies maintain strong dividend payout histories. Check the table for complete details. 

Advantages and Disadvantages of Investing in Hindalco Industries

Hindalco Industries Ltd

The primary advantage of Hindalco Industries Ltd lies in its leadership in the aluminum and copper sectors. As a part of the Aditya Birla Group, the company benefits from strong financial backing, technological expertise, and a vast global presence, ensuring stable growth and expansion opportunities.

1. Market Leadership in Aluminum: Hindalco is one of the largest aluminum producers in India and a key global player. The company’s comprehensive aluminum production capacity—from bauxite mining to aluminum metal production—enables it to meet diverse industrial needs, contributing significantly to its revenue.
   
2. Copper Operations and Integration: Hindalco is also a major player in copper production, with a fully integrated business model. The company processes copper concentrate into refined copper, benefiting from economies of scale, cost efficiencies, and a robust demand from the electrical and manufacturing sectors.
   
3. Strong Global Presence: With operations across 13 countries, Hindalco has a vast global footprint. This international presence allows the company to tap into growing markets, mitigate regional risks, and leverage supply chain advantages, enhancing its long-term growth potential.
   
4. Focus on Sustainability: Hindalco is committed to sustainable practices, including reducing its carbon footprint and increasing the use of renewable energy. Its efforts to improve resource efficiency and reduce environmental impact align with global sustainability goals, enhancing its reputation and attracting responsible investors.
   
5. Strategic Acquisitions and Expansion: Hindalco’s acquisition of Novelis, the world’s largest recycler of aluminum, has strengthened its global market position. The acquisition boosts its product offerings and recycling capabilities, aligning with the growing demand for environmentally friendly materials in automotive and other industries. 

The main disadvantage of Hindalco Industries Ltd is its heavy reliance on the cyclical nature of the aluminum and copper industries. Fluctuations in global prices, demand shifts, and economic downturns can significantly impact the company’s profitability and operational stability.

1. Exposure to Commodity Price Volatility: Hindalco’s revenues are highly dependent on the prices of aluminum and copper, both of which can be volatile due to global supply-demand factors. A price drop in these metals can hurt profit margins and reduce overall earnings.
   
2. Environmental Regulations: As an industrial company, Hindalco faces strict environmental regulations related to mining and production processes. Compliance with environmental standards increases operational costs, and failure to meet these regulations can result in penalties or disruptions in production.
   
3. Geopolitical and Trade Risks: Hindalco operates globally, exposing it to risks from international trade policies, tariffs, and geopolitical tensions. Trade restrictions or disputes in key markets like the U.S. or China could disrupt its supply chain or affect profitability.
   
4. Dependency on Large-Scale Operations: Hindalco’s business model relies heavily on large-scale production and capital investment. Any inefficiencies or delays in large-scale projects, such as its aluminum plants or copper refineries, can lead to significant financial losses and delayed returns.
   
5. Currency Fluctuations: With operations in multiple countries, Hindalco faces risks related to currency exchange rates. Fluctuations in the value of currencies, particularly the Indian Rupee, can negatively impact revenues and costs, affecting the company’s profitability from international operations. 

Advantages and Disadvantages of Investing in National Aluminium Company Ltd

National Aluminium Co Ltd

The primary advantage of National Aluminium Company Ltd (NALCO) is its strong position in the aluminum industry, with a vertically integrated business model. This allows the company to manage the entire production process, from mining bauxite to producing aluminum, ensuring cost efficiency and quality control.

1. Vertical Integration: National Aluminium Company Ltd is fully integrated, from bauxite mining to aluminum production and power generation. This integration reduces dependency on third-party suppliers, controls costs, and ensures quality across the entire production process, strengthening its competitive position in the market.
   
2. Cost Competitiveness: NALCO benefits from lower production costs due to its access to raw materials like bauxite and power generation capabilities. These cost advantages help the company maintain profitability even during price fluctuations in the aluminum market, giving it a financial edge.
   
3. Government Support: As a public sector enterprise, NALCO enjoys strong government backing, both financially and in terms of policy support. This support provides stability and enables the company to navigate economic and market challenges more effectively.
   
4. Strong Domestic Market: National Aluminium Company Ltd is one of India’s largest aluminum producers, catering to the growing demand for aluminum in various sectors such as construction, automotive, and packaging. The robust domestic market provides a stable revenue stream and growth opportunities. 

The main disadvantage of National Aluminium Company Ltd (NALCO) is its heavy reliance on the aluminum market, which is prone to fluctuations. A decline in global aluminum prices or demand could adversely affect the company’s revenue and profitability.

1. Dependence on Aluminum Prices: National Aluminium Company Ltd revenues are primarily driven by aluminum sales, making it vulnerable to global price fluctuations. A significant decline in aluminum prices could severely impact the company’s financial performance, especially during periods of reduced industrial demand.
   
2. Environmental and Regulatory Challenges: As a mining and metal production company, NALCO is subject to stringent environmental regulations. Compliance with these regulations requires significant investment in sustainable practices, which could increase operational costs and reduce profitability, especially during regulatory changes.
   
3. Limited Product Diversification: While National Aluminium Company Ltd is a leader in aluminum production, it has limited diversification outside this core business. This lack of diversification makes the company more vulnerable to industry-specific risks and economic downturns, limiting its ability to offset declines in aluminum demand.
   
4. Geopolitical and Market Risks: National Aluminium Company Ltd operates in a global market and faces risks associated with geopolitical instability, trade policies, and international market fluctuations. These factors can disrupt its supply chain, affect export revenues, and lead to higher operational costs in international markets. 

How to Invest in National Aluminium Company and Hindalco Industries Stocks?

If you’re interested in investing in National Aluminium Company and Hindalco Industries Stocks, you can do so effortlessly through Alice Blue, which offers zero brokerage on equity delivery trades, allowing you to purchase stocks without any additional charges.

Step 1: Open a Demat & Trading Account

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• Deposit money using UPI, Net Banking, or NEFT/RTGS for seamless transactions.

Step 3: Search & Analyze National Aluminium Company and Hindalco Industries Stocks

• Use the search bar to find National Aluminium Company and Hindalco Industries Stocks.
• Review the stock’s market price, charts, and company insights before making a decision.

Step 4: Place Your Buy Order

• Click “Buy” and select either a Market Order (instant purchase) or a Limit Order (buy at a specified price).
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Hindalco Industries vs. National Aluminium Company – Conclusion

Hindalco Industries Ltd is a global leader in aluminum and copper production with a diversified portfolio. Its strong market presence, cost efficiencies, and commitment to sustainability make it a robust choice for long-term investors seeking stability and growth, despite being exposed to commodity price volatility.

National Aluminium Company (NALCO), as India’s largest aluminum producer, benefits from vertical integration and strong domestic market demand. While its cost advantages and government backing provide stability, it faces risks from global price fluctuations and limited diversification, making it more vulnerable to industry-specific downturns.

Hindalco Industries vs. National Aluminium Company – FAQ

Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change over time. The securities quoted are exemplary and are not recommended.