The shares of the largest producer of iron ore fell up to 4.2 percent despite the board of directors of the company approves the bonus issue in the ratio of 2:1.
With a market capitalization of Rs 66,055.86 crore, the shares of NMDC LTD. were trading at Rs 225.40 per share, decreasing around 3.24 percent as compared to the previous closing price of Rs 232.95 apiece.
Reason for fall:-
Today the shares of the company have seen bearish movement after NMDC LTD announced a weak financial performance in which revenue zoomed by 22 percent on a yearly basis from Rs 4,014 crore in Q2FY24 to Rs 4,919 crore in Q2FY25, however, on a Quarterly basis revenue plummeted by 9 percent from Rs 5,414 crore in Q1FY25 to Rs 4,919 crore in Q2Y25.
Moreover, net profit jumped by 17 percent on a yearly basis from Rs 1,026 crore in Q2FY24 to Rs 1,205 crore in Q2FY25, meanwhile on a quarter-on-quarter basis net profit Dipped around by 39 percent from Rs 1,969 crore in Q1FY25 to Rs 1,205 crore in Q2FY25.
Bonus Issue:-
Moreover, the board of directors of the company also approved issues of bonus shares to the shareholders of the Company in the ratio of 2:1, which means 2 bonus equity shares of face value ₹1/- each fully paid up; for every 1 existing equity share of face value of ₹1/- each fully paid up, to the eligible members of the Company as on the record date.
Steel Performance:-
NMDC Steel Limited (NSL) produced over 1.5 million tons of hot metal in its first year, reaching 1 million tons within six months. It reduced losses by 50% and aims for monthly breakeven by Q2 FY25, quarterly breakeven by Q3, and 1 million tons of hot-rolled coil by August 2024. .
Capacity & capex plan:-
NMDC Steel Limited expects a monthly production run rate of 150,000 tons by the end of this quarter. For FY 2024-25, the company has set a capex target of ₹2,200 crores, with ₹384 crores already invested in the first quarter for future projects.
Key projects:-
NMDC Steel Limited has laid 73 kilometers of its slurry pipeline, with completion anticipated post-monsoon. While pellet and beneficiation plant projects are currently on hold for engineering revisions, they are expected to resume soon, marking progress on key infrastructure initiatives.
Management Sentiment:-
NMDC Steel Limited’s management recognizes risks related to the Supreme Court judgment but remains positive, supported by a stable customer base. However, fluctuating market prices are a concern, as these can impact average sales realization, which has already faced some downward adjustments.
Despite these challenges, management remains optimistic about future performance and recovery from liabilities. They express confidence in reaching production targets and improving financial metrics, bolstered by solid operational indicators. This outlook underscores their commitment to growth and resilience amid external market pressures.
Company profile:-
NMDC Limited is an India-based producer of iron ore. The Company is involved in the exploration of a range of minerals including copper, rock phosphate, limestone, magnesite, diamond, tungsten, and beach sands amongst others. The Company’s segments include Iron Ore, and Pellet, Other Minerals & Services.
Written by:- Abhishek Singh
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