Nalco, an 87% government-owned company, is the leading producer of alumina and aluminium in India with alumina refining capacity of 1.6 mtpa, and aluminium smelting capacity of 0.345 MT. The company is backward integrated with captive bauxite mines and a coal-based power plant of 960 MW. It is amongst the lowest cost producers of alumina and aluminium globally. Nalco plans to enhance capacity for its bauxite mines to 6.83 MT and for alumina to 2.28 MT. Additionally, it has  signed a MoU with the Government of Indonesia to set up a 0.5 MT aluminium smelter and 1,250 MW captive power plant.

NALCO has sustained growth momentum at both revenue as well as earnings level for the quarter ended June 2008. On the back of slowdown of commodities prices, the revenue of the company for the quarter grew by 4.39% to Rs 1467.49 crore. The operating margin rose from 49.94%to 58.81%.

Sales for the quarter were higher by 25.9% to Rs 14675  crore.
NALCO posted a 25.9% YoY growth in revenues primarily due to higher alumina and aluminium realizations and Sales volume of alumina and aluminium were up 7% and 11%, Y-o-Y, to 221 MT and 84 MT respectively.

Alumina realisations were up 47% Y-o-Y, at INR 16,235/t, while aluminium realisations were up 8% Y-o-Y, to INR 128,681/t

EBITDA margin was up by 20% YoY. Raw material expenses (as a percentage of revenues) were up from 6.7% in Q1FY08 to 8.1% in Q1FY09, due to increased input costs such as calcined petroleum coke and carbon tar pitch, and high power and fuel costs (owing to imported/ auctioned coal purchase).

Net profit for the quarter was up 18% Y-o-Y, at INR 525 Crores. The company does not avail of Section 80 IA benefit for its captive power plant, and thus, has a tax rate of 34%. It has cash of INR 3383 Crores on its books.

The power segment of NALCO has posted a growth of 3.6%. Revenue in Q1FY2008 was Rs 210 crores as compared to the Q1FY2009 of Rs 217.6 crores.

Having a close watch on the unfolding developments in the global financial markets and the impact of these on its growth plans it has undertaken the following expansion plans.

• Expansion of Bauxite plant from the existing 4.8MTPA to 6.3MTPA.
• Expansion of Alumina plant from the existing 1.6MTPA to 2.1MTPA.
• Expansion of Aluminium plant from the existing 0.3MTPA to 0.5MTPA.
• Expansion of Power plant from the existing 960MW to 1200MW

Larsen & Toubro the engineering & construction major has sustained strong growth momentum at both revenue as well as earnings level for the quarter ended Sep 2008. On the back of accelerated level of burning of strong order book, the revenue of the company for the quarter grew by strong 40% to Rs 7682.20 crore. The operating margin contracted marginally on account order mix as well as expenses on new business and forex losses. The growth at net profit level was 32% Rs 460.26 limited by higher interest cost on the back of higher borrowing and interest rate.

The strong growth in revenue and earnings was largely powered by the core business of the company engineering and construction that has posted a segment revenue growth of 41% and a segment profit growth of 43%. While the Machinery and Industrial products business was impressed with strong earnings growth the Electrical & electronics business put up a tepid performance for the quarter on the back of lower volumes.  
Order intake for the quarter was Rs 12453 crore translating into a growth of astounding 74% thus taking the total order book to 62956 crore, translating into about 2.5 times of the FY '08 sales providing strong revenue visibility.
Sales for the quarter were higher by 40% to Rs 7682.20 crore. On segment basis the upside has come from the core Engineering & Construction business (E&C) as well as Machinery & Industrial Products (MIP). While the segment revenue of E&C was higher by 41% (to Rs 5989.63 crore) contributing about 76% of sales, the MIP's segment revenue grew by 16% (to Rs 684.62 crore) contributing about 9% of sales. Electrical & Electronics (E&E) that consists of switchgears (low/medium), switchboards, petrol dispensing pumps etc saw its segment revenue grew by 13% impacted by lower volumes for switchgears on the back of slowdown in real-estate and petrol pump dispensers etc.

Operating profit margin for the quarter contracted marginally by 20 basis points to 8.8% on the back of change in project mix and greater level of subcontracting. The share of road orders which involves greater subcontracting seems to have greater share in recognition for the quarter. The company further indicated that it has incurred a expenses of around Rs 30 crore in the quarter ended Sep '08 relating to the new business ventures such as shipbuilding, power equipment, railways etc and the same was accounted at corporate level.

Segment profit of MIP was higher by 57% to Rs 136.97 crore as its segment margin expands impressively by 530 bps to 20.0%. Despite no fresh road orders the construction equipment sale in domestic market was strong. The strong exports of construction equipment have also resulted in gain on exchange pushing up the PBIT margin of the segment.

Segment profit of E&E was lower by 23% to Rs 84.66 crore as the profitability of the segment was affected by lower volume. The segment margin of it was lower by 530 bps to 11.1%.

The company which sold the Ready Mix Concrete business to Lafarge India is yet to complete the deal and it was expected this month and hence the profit on sale of it to be booked in the quarter ended Dec '08. On Oct 8, 2008 the company allotted bonus equity share of Rs 2 each fully paid up in the ratio of 1:1 to the existing shareholders. Moreover the company during the quarter has also allotted 186292 equity shares of Rs 2 each on exercise of stock options by employees.

Given the quality of the order book and the brisk inflow of orders so far during the quarter ended Sep ‘08, the Company is confident about meeting its financial goals for the current year that is 30% growth in order inflow as well as revenue for fiscal ending Mar 2009. The company is also hopeful of sustaining FY2008 EBITDA margin.