On Tuesday, the shares of India’s largest iron ore producer surged by 1 percent to reach an intraday high price of ₹248.85 per share. Meanwhile, a brokerage firm has issued a buy call on the stock, anticipating an upside of 21 percent.
The company’s share price has gained a multibagger return of 102 percent in the last six months and 15 percent on a year-to-date basis.
NMDC’s operational income increased by 45 percent yearly, from ₹3,720 crore in Q3FY23 to ₹5,410 crore in Q3FY24. During the same period, net profit also increased by 62 percent from ₹914 crore to ₹1,482 crore.
In the most recent fiscal year, the company reported a Net Profit Margin of 31.34 percent, while its operating margin at 36.70 percent.
NMDC is engaged in the exploration and production of Iron Ore along with Diamond, the production and sale of Sponge Iron, and the generation and sale of Wind Power.
Sharekhan has given a buy call on NMDC Ltd. The brokerage has given the target price of ₹290 per share, representing an upside of 21 percent from Tuesday’s trading price of ₹240 per share.
The company’s consolidated PAT stood at ₹1,672 crore, showing a quarter-on-quarter increase of 63%, surpassing the brokerage estimate by 8%. This growth was driven by outperformance in EBITDA margins, increased other income, and a rise in the share of profit from associates/JVs, as reported by the brokerage.
NMDC’s EBITDA per tonne witnessed a 42% quarter-on-quarter surge to ₹1,762, surpassing the brokerage estimate by 7%. This positive trend was attributed to higher realizations from iron ore and reduced costs. The iron ore sales volumes reached 11.4 million tonnes, marking a 19% quarter-on-quarter increase, aligning with the brokerage estimates.
The brokerage expects that near-term iron ore prices would remain range bound, and growth for NMDC would be primarily driven by higher volumes (management guided 47 mt/51-52 mt for FY24/FY25).
Written By Omkar Chitnis
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