ICICI Securities research report on NMDC
NMDC Q1FY21 EBITDA/te surprised on the back of better cost control, despite volumes declining 29% YoY to 6.28mnte. NMDC board has accorded in-principle approval to demerge the steel unit in a ‘time bound manner’. This can unlock significant value for the minority investors as hardly any value gets attributed to Rs 160bn of WIP in NMDC’s balance sheet on account of the steel plant.
Series of price hikes (~Rs 700/te post Q1FY21) rebasing expected EBITDA/te, possible resolution of Karnataka mining remain additional tailwinds. Maintain BUY.
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