Buy NMDC; target of Rs 215: Motilal Oswal
Motilal Oswal is bullish on NMDC recommended buy rating on the stock with a target price of Rs 215 in its research report dated June 24, 2021.
June 24, 2021 / 01:53 PM IST
Motilal Oswal's research report on NMDC
NMDC is a play on strong iron ore prices and volumes, well-reflected in its 4QFY21 result – EBITDA at INR42.4b (+53% YoY) and EBITDA/t at INR3,825 (+113% YoY) were the highest ever. We raise our FY22/FY23 EBITDA forecast by 61%/38% to factor in higher pricing and volumes. Reiterate Buy.
We value the stock at INR215/share on SOTP, valuing the Iron Ore business at 5.0x FY23E EV/EBITDA. We add the value of the steel plant at 25% of the book value. At CMP, the stock is trading at 4.0x the core Iron Ore Mining business and provides an attractive dividend yield of ~13%. Reiterate Buy.
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