XA Update Report | Alamtri Resources Indonesia Tbk. (ADRO) – Aluminum Driving Future Growth
By Axell Ebenhaezer (Senior Research Analyst) & Kevin Pratama (Research Associate)
8-Apr-2026
Alamtri Resources Indonesia (ADRO) reported a 10% YoY topline decline in FY25 (USD 1.87 billion) and a 21% decrease in net profit (USD 448 million). This was caused by declining coal ASP (-25% YoY) as benchmark prices slipped due to stagnating global demand. On the operational side, the company reported a 12% YoY increase in coal sales volume for FY25 to 6.28 million tons, with a large uptick in contribution from MC and LC mines.
🔹 New aluminum smelter to bolster performance; global supply deficit likely to widen
• ADRO’s new aluminum smelter has commenced testing and commissioning, with full production capacity expected to be reached by the end of 2026 as strategic ramp up continues.
• The smelter’s first phase has an installed capacity of 500k tons per year, and we see this new revenue stream to be the main driver of ADRO’s future growth.
• Global demand for the metal has steadily risen over the past few years, and we expect this trend to continue moving forward with installed capacity lagging behind.
• We see renewable energy, construction, and transport to be the main sectors leading this charge.
• As supply deficit steadily widen, we forecast aluminum prices to reach USD 3,600-USD 3,700 per ton by the end of the year, and potentially rising by 5-7% per year in the future. This will be a boon to ADRO’s performance down the line as the smelter moves towards its latter production phases.
🔹 India rolls back met coal import quotas as demand from steel industry continues to grow
• India has reversed its 2025 quantitative restrictions on low-ash met coke imports. This came in response to low efficiency among Indian steelmakers as mills responded to limited stock of low-ash coke with high-ash supply.
• The Indian government continues to prioritize the competitiveness of its domestic met coke producers and have replaced the quotas with import levies.
• We expect Indonesian met coal, with lower transshipment costs compared to most countries, to remain competitive and dominate the Indian market. India’s domestic met coal production is simply too small to cover the demand from its steel industry, and thus we see a rebound in imports for 2026 to be inevitable.
• However, we remain cautious regarding the met coal sector as several sectoral headwinds will pose challenges for industry players. We forecast Chinese met coal import demand to continue declining in 2026, despite domestic steel production stabilizing, as the country’s economy continues to mature.
• We also see domestic RKAB cuts posing as a double-edged sword, with a thinner supply limiting price downside while also forcing players to rely more on third-party coal, which will slash margins.
🔹 Buy recommendation with a TP of IDR 3,400
• We give ADRO a Buy rating with a TP of IDR 3,400. This implies a forward PE ratio of 9.82x, below the company’s 1-Yr PE SD+2. ADRO is currently trading at a TTM PE of 10.00x.
• Risks: 1) Rise in aluminum input costs 2) RKAB quota reduction 3) Delays in ramping up smelter production
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NH Korindo Sekuritas Indonesia berizin dan diawasi Otoritas Jasa Keuangan (OJK). Untuk informasi lebih lanjut, anda dapat menghubuni CS kami via email CSO@nhsec.co.id
