Accumulate NMDC; target of Rs 80: Prabhudas Lilladher

Prabhudas Lilladher recommended Accumulate rating on NMDC with a target price of Rs 80 in its research report dated August 13, 2025.

Broker Research

August 14, 2025 / 14:32 IST

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Prabhudas Lilladher's research report on NMDC

NMDC reported a strong Q1FY26 operating performance, driven by robust volume growth and better-than-expected pricing. Volumes grew 14% YoY supported by strong domestic steel demand supported by increased GoI spending and a lower base (volumes impacted by strike). Realizations rose 7.4% QoQ, led by price hikes undertaken for lump and fines from May’25. Moderate increase in employee cost and lower ramp up of KIOCL pellet plant aided NMDC to deliver an EBITDA/t of Rs2,152. Receivables from RINL/NSL continue to remain elevated, keeping the cash conversion cycle under pressure. The Karnataka Mineral Rights and Bearing Land Tax Bill remains a major uncertainty for NMDC, which is still pending at President of India.

Outlook

We maintain 50/55mt volumes for FY26/27E and expect NMDC to deliver Revenue/EBITDA/PAT CAGR of 20%/20%/17% respectively. At CMP, the stock is trading at 5.4x/4.4x EV of FY26/27E EBITDA. Maintain ‘Accumulate’ with a revised TP of Rs80 (earlier Rs73) valuing it at multiple of 5x EV of Mar’27E EBITDA.

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