NMDC Q1 PAT seen up 13% QoQ to Rs 1861 cr

Net sales are seen going up by 4% YoY and 11.6% QoQ to Rs 2,894 crore during the same period.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to be flat YoY at Rs 2,262 crore in the April-June quarter, but that is expected to rise by 14.4% QoQ.

EBITDA margin is also seen falling 280 basis points YoY to 78.2% in the June quarter, but that is likely to increase 200 basis points QoQ.

In the previous quarter, the profit after tax was hit due to an exceptional item of Rs 51.3 crore for impairment of windmills in Karnataka.

Sales volumes are expected to improve sequentially as there was a breakdown in a slurry pipeline last quarter. Realizations are expected to remain marginally higher in the quarter.

Analysts feel the NMDC will benefit from structural shift in iron ore pricing from export parity to stronger domestic market dynamics.

Volume growth is expected due to fast track approval by the government for some of its mines.

Higher contribution from Karnataka:

Supreme Court had permitted NMDC to mine 1 mt per month in Karnataka in September 2011. But they are reportedly producing 0.7mt per month.

Profit after tax is also likely to be supported by other income, which is expected to increase sequentially and YoY on account of rising cash surplus.

Now the company expects sales volumes of 30 million tonnes in FY13 as against 27 million achieved in FY12. Earlier it had targeted about 33 million tonnes for FY13.