The 12 reports from 5 analysts offering long term price targets
for NMDC Ltd. have an average target of 109.00. The consensus estimate
represents an upside of 16.39%
from the last price of 93.65.
Donimalai mine. Unperturbed by the ongoing legal issue, we are rather more concerned on the i) structural risk to the domestic iron ore pricing and ii) sharp shrinkage in market share of merchant miners post auction of mines expiring by March-2020 in Odisha. Mine auctions benefit the manufacturer as it serves raw material security replacing the dependence on merchant miner at lower cost. It would act as the key enabler for capacity creation with no impact on State Govt's revenue from royalty. We downgrade NMDC to Reduce as we expect steep increase in Odisha's production (due to last year of...
Viability of NMDC's mining operations is threatened by Karnataka's pre-condition to share of 80% revenue for renewing mining leases of Donimalai, which has capacity of 4mtpa. The outcome of legal and diplomatic settlement may set a precedent for other mines. This was unexpected because public sector enterprises (PSEs) have been getting their leases renewed without sharing of any revenue - e.g. leases of Nalco's bauxite mines have been recently extended to 2029 and 2032without any share in revenue; many PSEs have been allotted coal blocks on a nomination basis
NMDC's Q2FY19 performance came in below our estimates. The company reported a sales volume of 6.7 million tonne (MT), down 19.2% YoY, 1.4% QoQ, lower than our estimate of 7 MT. The topline...
13 November 2018 2QFY19 adjusted EBITDA declined 7% QoQ (+8% YoY) to INR13.8b, marginally below our estimate of INR14.8b due to lower-than-expected realization and higher operating expenses. EBITDA is adjusted for (a) rail line doubling payment of INR480m and (b) expected credit loss of INR747m, which are non-recurring. Higher discounting at Karnataka impacted realization. EBITDA per ton declined 6% QoQ to INR2,061 (USD30) due to higher operating expenses. NMDCs volumes were impacted over the last few quarters due to higher prices and monsoon-related disruption. Domestic prices have become competitive as global iron ore prices have strengthened. We expect iron ore volume CAGR of 5-6% over the next 4-5 years from the existing mines. The steel plant is likely to produce about 1mt in FY21 and full 3mt in FY22. Margins in the steel business are likely to be 10,000/t, as it has many advantages.
In September 2018, NMDC took a price hike of | 200/tonne for iron ore lumps and | 150/tonne for iron ore fines (the price hike will be with effect from September 7, 2018). The revised prices for iron ore lumps are at | 3550/tonne (from | 3350/tonne previously) while prices of fines have been revised to | 3110/tonne (from | 2960/tonne previously). The increase in iron ore prices is in the backdrop of a healthy demand scenario and increased pellet prices. Cumulatively, since July 2018, iron ore lumps prices have increased by ~| 500/tonne while fines prices have...
NMDC has revised prices of domestic iron ore thrice YTD, adding up to Rs300 and Rs350 per tonne for iron ore fines and lump ore to Rs2,960/tonne and Rs3,350/tonne, respectively. We believe that the recent hike in the iron ore prices is backed by 4% month on month increase in international iron ore prices, rupee depreciation and the surge in pellet prices (~4 years high / +25% YoY). Though, we continue to remain cautious on the outlook of iron ore prices for the medium to long term perspective. But, expect it to remain...
For Q1FY19, NMDC reported a healthy performance on the profitability front. NMDC reported sales volume of 6.84 million tonne (MT), lower than our estimate of 7.5 MT. Topline for the quarter came in at | 2422.0 crore, down 14.8% YoY, 37.6 QoQ vs. our estimate of | 2486 crore. The blended iron ore realisations during the quarter was at | 3504/tonne, up ~18% YoY, down 4.1% QoQ On the back of healthy iron ore realisations YoY and lower costs, the company for the quarter reported an EBITDA of | 1423.9 crore (down...
8 August 2018 NMDCs 1QFY19 adj. EBITDA declined 29% QoQ (-9% YoY) to INR14.8b (est. of INR13.5b) due to 35% QoQ/26% YoY decline in volumes to 6.8mt. EBITDA is adjusted for (a) rail line doubling payment of INR291m and (b) expected credit loss of INR258m, which are non-recurring. Adj. PAT declined 30% QoQ to INR9.7b (est. Production was down 39% QoQ/19% YoY to 6.9mt due to low dispatches. Domestic realization was down 3% QoQ (+21% YoY) to INR3,541/t (6% beat).
NMDC reported Q4FY18 earnings below our expectation due to higher than expectedcosts.NMDCkeptitspricesfirmseeingstrongprofitabilityofsteelmills, overlooking the weak global iron ore prices. We believe that strategy is totally misplacedandmoreshortsightedgiventhestructuralshiftinincreasingshareof captive mines (thanks to auction of mines by Govt) and overcapacity in domestic market.Outlookonglobalsteelmarketsremainsstrongonthebackofstructural withdrawal of capacities in China and focus on profitability. However, iron ore prices remained weak with current prices at US$64/t (down 15% from Q4 levels)...
For Q4FY18, NMDC reported a healthy performance, which came in above our estimates. The company reported a sales volume of 10.5 million tonne (MT) (our estimate: 10.0 MT). Topline for the quarter was at | 3883 crore up 35.2% YoY, 57.3% QoQ, higher than our estimate of | 3347.6 crore. The blended iron ore realisations increased 26% YoY, 21.8% QoQ to | 3653/tonne (vs. Q4FY17: | 2898/tonne, Q3FY18: | 2999/tonne, our estimate: | 3236/tonne) On the back of healthy iron ore realisations, EBITDA was healthy at...
ICICI Securities Ltd | Retail Equity Research For Q3FY18, NMDC reported a healthy performance, in line with our estimates. Sales volume was at 8.1 million tonne (MT) (our estimate: 8.3 MT). Topline for the quarter was at | 2469 crore, down 1.2% YoY, up 2% QoQ in line with our estimate of | 2445 crore. The blended iron ore realisations during the quarter were at | 3014/tonne, up 23.4% YoY and 5.7% QoQ (our estimate: | 2799/tonne) On the back of healthy iron ore realisations, the company reported a...
Capacity utilization to improve as demand is rising sharply NMDC has iron ore mining capacity of 46mtpa, but utilization is only ~80%. We expect utilization to improve gradually to 100% over the next 2-3 years, as its key customers (JSW steel, Essar Steel and RINL) are all ramping up production. There will be additional demand of 15-20mtpa. NMDC is well placed to serve them due to its high quality of ore and access to rail infrastructure. NMDC is also investing in doubling of the KK line to improve evacuation from the Chhattisgarh complex. Steel plants, albeit delayed, will be highly profitable...
ICICI Securities Ltd | Retail Equity Research NMDC reported an in-line performance for Q2FY18. Topline and EBITDA were broadly in line with our estimates NMDC reported sales volume of 8.3 million tonne (MT) against our estimate of 8.5 MT. Topline for the quarter was at | 2421.3 crore up 39.2% YoY (our estimate: | 2488 crore). The blended iron ore realisations were at | 2852/tonne up 40.4% YoY The company for the quarter reported an EBITDA of | 1203 crore up...
Higher capex by the company would indeed support its production off take. Indian Steel Ministry intends to raise India's steel production to 300 mtpa by FY25 on the back of long term growth prospects of the economy which in turn would benefit the iron ore industry. The long term outlook of Indian steel industry looks promising as the sector enjoys competitive advantages due to the impetus being given by the government to infrastructure growth, urbanization and rising incomes. Low per capita steel...
NMDC reported Q1FY18 earnings below our expectation due to lower than expectedrealisationsandhighercosts.Thoughglobalironorepricesmovedupon thebackofstrongrevivalinChinesedemand,theupmoveisnotthatmaterialto supportsignificantpricehikeinthewakeofdomesticsupplyglut.Weexpectglobal pricestocalmdowngiventhealltimehighinventoryatChineseports,increasing...
NMDC reported a strong Q1FY18 performance. The healthy performance was marked by higher-than-expected iron ore realisations and lower-than-expected-cost NMDC reported a sales volume of 9.18 million tonne (MT). The topline for the quarter came in at | 2841.5 crore, up 65.1% YoY. Blended iron ore realisations were at | 3060/tonne, up 40.2% YoY On the back of healthy iron ore realisations and lower overall cost, for the quarter, the company reported a healthy EBITDA of | 1494.9 crore,...
1QFY18 adj. EBITDA grew 98% YoY (+13% QoQ) to INR16.2b, exceeding estimate by 7%, due to higher regional and mix premiums. EBITDA is adjusted for (a) rail line doubling payment of INR411m and (b) expected credit loss of INR815m,...
NMDC's business is strongly supported by robust demand growth from its key customers (JSW, Essar, RINL, etc.), high quality ore and strong supply chain. Sales increased by 24% to 35.6mt and adjusted EBITDA by 28% to INR45b in FY17. NMDC also rewarded shareholders with an impressive INR96b in the form of buyback and dividend. However, reported PAT declined 23% YoY in FY17 as the company used the strong financial performance to clean its book aggressively, providing for ~INR9b toward mine closures, capital assistance to the Indian...
