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NMDC Ltd.

BSE: 526371 | NSE: NMDC |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE584A01023 | SECTOR: Mining & Minerals

BSE Live

Sep 23, 16:00
80.20 -0.95 (-1.17%)
Volume
AVERAGE VOLUME
5-Day
548,921
10-Day
441,201
30-Day
503,609
382,539
  • Prev. Close

    81.15

  • Open Price

    82.00

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

NSE Live

Sep 23, 15:59
80.20 -0.90 (-1.11%)
Volume
AVERAGE VOLUME
5-Day
14,162,053
10-Day
10,536,981
30-Day
11,054,793
7,243,400
  • Prev. Close

    81.10

  • Open Price

    81.80

  • Bid Price (Qty.)

    80.20 (2112)

  • Offer Price (Qty.)

    0.00 (0)

Annual Report

For Year :
2019 2014 2006

Chairman's Speech

Dear Stakeholders,

FY2019 was a satisfying year given the complex global and domestic dynamics, we are witnessing in front of us. This achievement could only be possible because of the strong values and culture that your Company stands for.

ECONOMY

After a GDP growth up to 8% in Q1 FY2019, economic activity slowed down in Q2 led mainly by a large drag from net exports, which became entrenched in Q3 due to deceleration in public spending and private consumption. On the supply side, agriculture and allied activities characterized by a modest growth in kharif and horticulture production. Industrial growth also decelerated led by a slowdown in manufacturing activity. However, services sector activity remained resilient, supported primarily by construction, financial services, and public administration and defense. Despite a challenging year, the Indian economy continued to remain the world''s fastest growing large economy. During the fiscal, the overall economic scenario remained under stress with GDP growth slowing down gradually each quarter to 5.8% for Q4 FY2019, making annual GDP growth of 6.8% for FY2019*. With this economic backdrop, a spate of policy reforms to develop and propel the economy have been introduced, with more on the anvil. The growth in savings, the increasing formalization of the economy, rapidly growing digitization across various economic activities; and the continuing entrepreneurship and aspirations of the population is driving both demand as well as innovation in the industrial and services sectors of the economy. These attributes along with a well monitored regulatory mechanisms make it a resilient economy.

INDUSTRY TRENDS AND NMDC

India has emerged as the fastest growing major economy in the world and is expected to be one of the top economic powers of the world over the next 10-15 years, backed by strong policies and reforms by the Government supporting higher growth. The thrust of Government of India to enhance spending on infrastructure augurs well for the steel industry and thereby, the iron ore sector. In the near term, your Company is bullish on the growth prospects of India''s steel industry, with its competitive advantages and the impetus being given by the government to the steel sector. The envisaged growth in key sectors will facilitate more consumption and demand for steel from sectors such as, infrastructure, housing, railways, consumer durables and automobile. The persistent demand of high grade ore should help NMDC in improving its performance in terms of volumes as well as EBITDA margins. Coupled with growing urbanization; rising income levels of the burgeoning Indian middle class; Government initiatives such as Make-in-India, Freight corridors, 100 Smart cities, Rural electrification and Housing for all by 2022, NMDC sees a bright future for the mining and steel industry.

Worldwide, environmental concerns in mining, iron and steel sector, plant closures in China, mainly Induction Furnace and Blast Furnace with low volume and supply disruptions in two of the largest global ore producers mean that the price for steel will remain stable, if not get firmer. Continuous thrust by the government to use domestically manufactured iron and steel products in government procurement, as well as anti-dumping restrictions on steel imports in the country on account of measures being taken by Government of India bode well for NMDC and the iron ore mining industry.

PORTFOLIO

NMDC''s current mining capacity stands at 43mn tonnes. We are already India''s largest iron ore producer, and going forward, we are targeting substantial increase in mining capacity by improving our evacuation capabilities in Chhattisgarh by doubling the KK line from Kirandul to the Jagdalpur line by 12 MTPA in our existing operations. We are also planning to develop 15 MTPA of Greenfield mines (JV with CMDC).

PERFORMANCE

During the year under review, your Company has earned profit before tax of Rs,7,199 crore (up 16.50% YoY) on a turnover of Rs,12,153 crore (up 4.63% YoY) in comparison with previous year''s achievement of Rs,6,179 crore and Rs,11,615 crore respectively.

Your Company posted a PAT of Rs,4,642 crore, up by 21.97% YoY, while the net worth of your Company by end of the fiscal FY2019 stood at Rs,25,952 crore, up by 6.56%. For the year FY2019, I am pleased to inform you that your Company has achieved both production and sales of 32.36 MT despite Donimalai Mine being closed w.e.f. 04.11.2018. Your Company made capital expenditure of Rs,2,090 crore (including investment) during the year under review.

SHAREHOLDER RETURNS

During the year under review, the Board of Directors of your Company, at its meeting held on 8th January 2019, approved a share buyback of 10,20,40,815 fully paid-up equity shares of face value of Re. 1 each (representing 3.23% of the total number of Equity Shares in the paid-up share capital of the Company) from all the existing shareholders / beneficial owners of Equity Shares on proportionate basis. This was done through the Tender Offer route at a price of Rs,98 per Equity Share payable in cash for an aggregate consideration not exceeding Rs,1,000 crore .

In line with excellent track record set in earlier years, your Directors have approved Dividend for FY2018-19 @ '' 5.52 per share against Rs,4.30 per share in the previous year.

SOCIAL AND ECONOMIC CONTRIBUTION

Your Company believes that the well-being of the society at large is a pre-requisite for progress of business and prosperity of the organization. This has been the Company''s underlying philosophy in its approach to society. NMDC continues to make significant economic and social contribution in the countries where it operates. During FY2019, we paid Rs,2,590 crore in corporate taxes, and made significant economic contribution to our employees and suppliers. We have pursued several activities that include Prayas - A Pursuit to Education;

Nirmaya - Towards Healthy Life; Prakalp - Creating Infrastructure; and Kaushal - Skilling People. I encourage you to read the CSR Annexure within the Directors'' Report, to know more about the excellent work your Company and its employees do towards social development for the people and the environment in the surrounding areas of our operations.

SUSTAINABILITY

Our sustainability strategy focuses on the areas that represents key challenges and opportunities that is Community Development, Employee Welfare, Scientific Mining, Employee Safety, Biodiversity Conservation, Energy Efficiency and land reclamation. The Company has consciously aimed at surpassing legal compliance requirements, and ensured that the policies and procedures related to ethical business practices are implemented.

OUR PEOPLE

Our success this year is due to the hard work and perseverance of our people, and I thank them for their dedication and enthusiasm. I am particularly grateful for their commitment to making NMDC a safer, more productive and more responsible company. Our aspiration is to continue to be the pioneer of our industry, with a culture that welcomes and nurtures new ideas and higher performance.

THE FUTURE

As we look to the future, we see positive market conditions for India, and we expect our growth agenda to be well absorbed by the subsequent growth in anticipated demand. At NMDC, we continue our strong focus on meeting our 2025 vision, growth and value chain productivity. Our partnership with society and our sustainability agenda must remain important priorities. We will continue to make every effort to keep our people safe, healthy, and equipped to meet the challenges of the coming years.

With a strong balance sheet, world-class portfolio, smart and dedicated people across our organization, we are well positioned to leverage on our opportunities and to create new opportunities. We will continue to drive productivity, and aim to deliver superior value as we satisfy India''s demand for steel.

N. Baijendra Kumar

Chairman-Cum-Managing Director