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Last Updated : Aug 31, 2020 04:36 PM IST | Source: Moneycontrol.com

Buy NMDC; target of Rs 120: Motilal Oswal

Motilal Oswal is bullish on NMDC recommended buy rating on the stock with a target price of Rs 120 in its research report dated August 04, 2020.

Broker Research

Motilal Oswal 's research report on NMDC


NMDC has cumulatively raised iron ore prices by INR400/t over Jul–Aug on improving volumes (up 7% YoY in Jul’20), ahead of our expectations. Rising capacity utilization by steel players and higher steel prices bode well for NMDC and should support higher volumes and prices; we raise our EPS estimate by 12%/5% for FY21/FY22. We also find the valuation attractive as CMP of INR85/sh implies nil value for the 3mtpa Nagarnar steel plant (INR55/sh book value) and a 6.5% dividend yield. Reiterate Buy.


Outlook


Also, the stock provides dividend yield of ~6.5% at current prices. We value the stock at INR120/share on an SOTP basis – 5x FY22E EV/EBITDA for its core iron ore mining business and 50% of the book value for the Nagarnar plant. Reiterate Buy.


For all recommendations report, click here


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First Published on Aug 7, 2020 01:56 pm
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