Cost reduction & increase in production have helped for a good result of NALCO: TK Chand, CMD

In an exclusive interaction with ET NOW, TK Chand, CMD, NALCO talks about top line growth despite the fall in realisations this quarter. Excerpts:
ET Now: Your top line growth has been good, what has led to that despite the fall in realisations this quarter? TK Chand: My realisation has in fact fallen very heavily because LAB has gone down by 16% and this good result in fourth quarter is mainly due to higher production and we have registered high production in hydrate as well as bauxite and also aluminium production. The metal production has grown by around 14% and hydrate production has grown by 6% and bauxite transportation has grown by 10%. So, primarily this has helped in addition to the cost cutting exercises particularly cost reduction measure has also helped because NALCO this year has become the lowest cost producer of aluminium in the world. That is what this cost reduction as well as increase in the production both have combined to help for a good result of NALCO in the fourth quarter.

ET Now: Take us through your margins, do you think you can sustain and grow the margin numbers? TK Chand: Yes, as far as NALCO is concerned, right now NALCO is making profit actually and of course LAB has again further gone down as compared to April and March and we expect that there will be a moderate recovery of NAV in the course of the year. So, in that case we will be able to scrap through because tight cost factors that will help us. And this year also we are planning to further increase our production. So this increase in volume and also reduction in the cost - both are likely to help us. In addition to that, we are expecting that we may be getting bridge linked coal. If bridge linked coal comes then we may be getting it little cheaper than the e-auction coal that will also be a factor for helping us in maintaining the profitability line.

ET Now: What are your currently or how are you currently sourcing your coal requirements and when will you commission your Utkal D, E and when will you participate in the auctions? TK Chand: Right now we are getting all our coal from Coal India, through linkage system and also a part of the coal around 30-40% we are getting through e-auction and we are intending that once this D block, we open it which will be around 24 month hence. We will be able to raise around two million ton of coal from the mines itself and to that extent we will be reducing the e-auction procurement, which we are right now taking it from Coal India.

ET Now: Post the buyback, what will be the cash on the books for NALCO? TK Chand: Right now we are having around 5600 crore cash in terms of deposits etc and out of that this buyback or 64.4 crores of share at a rate of Rs 44 per share works out to around 2835 crores and if we take away that 2835 crores somewhere around another 3000 crores will be left out.