NMDC Ltd. share price forecast

The process of commissioning of the steel plant has already started and hot metal production is likely to start in 1HFY23. We believe the demerger of the Nagarnar Iron and Steel Company (NISP) will be the key trigger for the stock. Thereafter, the government is likely to call for bids from potential suitor, which should likely culminate into sale of the government's holding in the steel plant to the new owner. The management has highlighted that the demerged financials would likely be presented to the Board in 1HFY23E....

During the quarter, NMDC reported iron ore sales volume of 9.8 MT, up 6% YoY & 9% QoQ (in line with our estimate of 9.9 MT). EBITDA/tonne came in at | 2654/tonne, higher than our estimate of | 2500/tonne (EBITDA/tonne of...

NMDC reported Q3FY22 EBITDA in line with our estimates while above consensus estimates (CE) by 3% at Rs26.1bn, down 16% QoQ/6% YoY. Global iron ore prices increased ~56% in last three months in wake of positive...

NMDC reported strong but inline set of numbers. Revenue/EBITDA/APAT for the quarter stood at INR58.7b/INR 26.1b/INR20.5b. The results were down sequentially due to continuous correction in iron ore prices during the last 6 months. EBITDA/t for the quarter was INR2,654/t (YoY down 5.6%, QoQ down 5.6%). The ore prices corrected due to weak international steel prices and lower production from China which resulted in surplus pellets in India leading to steep correction in ore prices by 37% during that period....

Metals & Mining: Takeaways from call with NMDC

NMDC intends to offset pricing headwinds with volume ramp-up in H2FY22

During the quarter, NMDC reported iron ore sales volume of 9.0 million tonnes (MT), up 36% YoY but down 5% QoQ (in line with our estimate of 8.9 million tonnes). EBITDA/tonne came in at | 3488/tonne, higher than our estimate of | 3000/tonne (EBITDA/tonne of | 4421/tonne in Q1FY22) For the quarter, revenue from operations was at | 6794 crore, up 205% YoY & 4% QoQ, higher than our estimate of | 5944 crore. EBIDTA for the quarter was at | 3115 crore, up 202%YoY but down 25%QoQ, higher than our estimate of | 2679 crore. Ensuing PAT was at | 2341 crore, up 202% YoY...

in steel mill's margins with sharp increase in coking coal cost. However, domestic iron ore supplies would remain uncertain due to surrender of auctioned mines and low visibility on production by state PSUs in Odisha. In spite of weakness in global iron ore prices, we maintain our Accumulate rating on back of attractive valuations, constrained domestic supplies and value unlocking on demerger of steel plant. We retain our TP of Rs170 based...

EBITDA for the quarter was at | 4178 crore (up 453% YoY but down 2% QoQ), higher than our estimate of | 3589 crore. EBITDA/tonne for Q1FY22 was at | 4421/tonne, higher than our estimate of | 3750/tonne...

Additional royalty of 22.5% (w.e.f. 28th March, 2021) impacted only half of its volumes as it included 5.1mnt of opening stock produced. NMDC reported Q1FY22 EBITDA below our estimates by 5% while above consensus estimates (CE) by 10%. Lower than estimated realisations was the...

NMDC Limited is engaged in mining of iron ore.

NMDC reported an operationally healthy set of numbers for Q4FY21 wherein topline and EBITDA came in higher than our estimate. For Q4FY21, NMDC reported sales volume of 11.1 MT, up 29% YoY, 19% QoQ (our estimate 11.1 MT). For Q4FY21, NMDC reported topline of | 6848 crore (up 115% YoY, 57% QoQ), higher than our estimate of | 6133 crore. Better-than-expected realisation aided Q4FY21. NMDC's blended realisation for Q4FY21 was at | 6138/tonne, up 67% YoY, 32% QoQ, higher than our estimate of | 5500/tonne. EBITDA for the quarter was at | 4242 crore (up 184% YoY,...

Higher pricing to offset impact of premium levy NMDC is a play on strong iron ore prices and volumes, well-reflected in its 4QFY21 result EBITDA at INR42.4b (+53% YoY) and EBITDA/t at INR3,825 (+113% YoY) were the highest ever. We raise our FY22/FY23 EBITDA forecast by 61%/38% to factor in higher pricing and volumes. Reiterate Buy. EBITDA up 53% YoY on higher pricing and better volumes Revenue / EBITDA / Adjusted PAT rose 57%/53%/51% QoQ (in-line) to...

NMDC Limited is engaged in mining of iron ore.

Risks emanating from rising domestic supplies are very well factored in our estimates with FY22 realisations assumed at steep cut of ~20% over current levels and hefty discount of ~45% (above the historical average of 35%) to import parity price. On the back of stable outlook on global iron ore prices and value unlocking with the demerger of steel plant, we maintain BUY rating with TP of Rs145 based on 1) EV/EBITDA of 4x FY22e for iron ore operations...

NMDC underperformed steel stocks by a wide margin over last three months due to uncertainty regarding payment of premium for its Donimalai mine's lease renewal. After two years impasse, Govt of Karnataka renewed Donimalai mines (with capacity of 7mtpa) at a premium of 22.5% of sales price. We expect that similar premium would be paid for its iron ore operations in Chhattisgarh, which constitutes 78% of its overall volumes. Severe shortage in domestic market (due to supply disruptions in Odisha), strong profitability of steel producers and firm outlook on global prices shall...

Process underway for divestment of steel plant NMDC reported Q2FY21 EBITDA missed our estimates by 5% while it is 4% above consensus estimates. Miss was largely due to lower than expected realisations, partially offset by lower costs. Unlike past, NMDC has been forthcoming this time in undertaking price hikes in tandem with strong global prices and shortage in domestic market....