Buy NMDC: target of Rs 165: Sharekhan

Sharekhan is bullish on NMDC has recommended buy rating on the stock with a target price of Rs 165 in its research report dated March 03, 2021.

March 04, 2021 / 02:12 PM IST
  • bselive
  • nselive
Todays L/H

Sharekhan's research report on NMDC

Multiple triggers for higher iron ore production given re-start of Donimalai mine, expansion for Kumarasamy mines and debottlenecking at Chhattisgarh mines. We expect 30%/7% y-o-y growth in iron ore sales volume to 43mt/46mt in FY22E/FY23E. Higher volume and elevated iron ore price (given high international price >$150-160/ton currently and likely iron ore deficit in domestic market until FY23) would cushion NMDC’s earnings from potential royalty premium (assumed at 22.5%). Strategic sale of Nagarnar Steel plant would result into value unlocking of CWIP of Rs16,500 crore and could add further value (~Rs22-25/share) to the stock as street is ascribing only 50% value to steel plant.


We re-initiate coverage on NMDC with a Buy rating and PT of Rs. 165 as valuation of 3.7x FY23E EV/EBITDA for core business factors in risks associated with higher royalty payout but ignores value unlocking from Nagarnar Steel Plant.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Mar 4, 2021 02:12 pm

stay updated

Get Daily News on your Browser