Buy NMDC; target of Rs 84: LKP Research

LKP Research is bullish on NMDC has recommended buy rating on the stock with a target price of Rs 84 in its research report dated May 30, 2025.

Broker Research

May 30, 2025 / 10:23 IST

buy

26 Aug, 2025 12:21

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LKP Research's research report on NMDC

NMDC Ltd’s consol Revenue/EBITDA/PAT stood at ₹70 bn/₹20.5 bn/₹14.8 bn (+7.9%/- 2.4%/+4.8%), which was subdued as iron ore production remained flat during the quarter at 13.3 mt in Q4FY25. Revenue growth of 7.9% was mainly driven by a whopping 967% increase in revenues from pellets and HR coils (trading), whereas iron ore sales were down 1.2% YoY to ₹63.5 bn in Q4FY25. Pellet sales came in at ₹4.5 bn, and HR coil sales were at ₹1 bn in Q4FY25. During the quarter, iron ore realization stood at ₹5,007/t, down 7% YoY. In FY25, blended realization came in at ₹5,133/t, up 9.6% YoY. Iron ore production in Q4FY25/ FY25 came in at 13.3 mt/44.1 mt, down 6%/2% YoY, respectively, due to a loss of 43–44 days of production caused by strikes, while sales stood at 12.7 mt/44.4 mt, up 1%/flat YoY in Q4FY25/FY25, respectively. According to management, if the strike issue hadn’t occurred, they would have notionally clocked the 50 mt mark during the year. April’25 (provisional) volumes were strong at 3.6 mt (up 2.8% YoY), and the company plans to operationalize two new coal and iron ore blocks in JV with Chhattisgarh Mineral Development Corporation.

Outlook

In FY25 NMDC’s sales volume stood at 44.4mt (flat YoY). Consol Revenue came in at ₹239 bn (+12.2% YoY), EBITDA was ₹81.5 bn (+11.7% YoY), and APAT stood at ₹65.4 bn (+17.3% YoY). EBITDA/tn stood at ₹1,834 (+12% YoY) in FY25. The Board declared a final dividend of ₹1/share (along with an interim dividend of ₹3.3/share) during FY25.

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