More Stories

Informist, Monday, Nov. 11, 2024

By Aman Aryan and Ketan Barot

MUMBAI – Although NMDC Ltd. Monday reported better-than-expected revenue for the September quarter, its net profit for the quarter missed the Street's estimates. Despite reporting a strong average domestic realisation for iron ores, increased expenses related to inventories and royalty and other levies slowed down the company's net profit for the period to the second-lowest in the past seven quarters. 

The company's net profit, including an INR 1.9 million loss from discontinued operations, was INR 12.69 billion for the latest quarter, up 23.5% from INR 10.28 billion in the year-ago quarter. Analysts had expected NMDC to report a net profit of INR 13.72 billion. The sales of 9.73 million tonnes drove the company's revenue for the latest quarter to INR 48.07 billion, up 19.8% from INR 40.14 billion a year ago. Sequentially, the company's net profit fell 36% and its revenue fell 10.6%.

The company's Jul-Sept sales rose 2% from 9.57 million tonnes in the year-ago quarter, but they fell 3.4% from the previous quarter. The public sector iron ore producer's output for the September quarter fell 6% to 8.29 million tonnes.  

While a 17% on-year rise in the average domestic realisation to INR 4,852 per tonne aided the company's earnings for the September quarter, higher royalty and other levies slowed the momentum. Meanwhile, the average realisation for the company fell 8.5% sequentially. While the analysts expected lower royalty costs to offset the cumulative price cuts of INR 1,000 per tonne in the latest quarter, royalty and other levies rose to INR 17.5 billion from INR 15.1 billion a year ago. Besides these, an increased inventory related expense, which rose to INR 4.80 billion from INR 2.80 billion a year ago, also slowed the company's net profit growth for the September quarter.  

The company's earnings before interest, tax, depreciation, and amortisation for the latest quarter rose to INR 18.01 billion from INR 15.14 billion a year ago. However, its EBITDA margin fell to 37% for the latest quarter from 38% in the year-ago quarter.

The iron ore segment and the pellet, other minerals, and services segment both reported a strong performance in the latest quarter. The company's revenues from its iron ore segment rose to INR 47.49 billion for the September quarter from INR 39.97 billion a year ago. Revenues from its pellet, minerals, and services segment rose to INR 867.2 million from INR 465.5 million a year ago. 

In August, NMDC received a show-cause notice along with a penalty demand of INR 16.21 billion from the District Collector, South Bastar in Chhattisgarh, alleging mineral dispatches without timely railway transit passes. The company said it has filed a writ petition with the High Court and has included this amount in its 'contingent liabilities'.  

On Sept. 4, the company signed a memorandum of understanding with Rashtriya Ispat Nigam Ltd. to lease 1,167 acres for the long-term to set up various facilities, NMDC said. Under the agreement, NMDC will pay INR 1 per year for 33 years as rent for the leased land. The company also said a joint meeting is scheduled Thursday to discuss the present status of Bastar Railway Pvt. Ltd., a joint venture company of NMDC, regarding the 140 kilometres Jagdalpur-Rowghat rail corridor project in Chhattisgarh which is being taken over by the Ministry of Railways. The cost incurred on the project is likely to be recovered fully, the company said. The company did not disclose the cost it had incurred on this project.

The company said its board of directors had reviewed and approved the company's financials for the latest quarter as the audit committee could not be reconstituted due to an inadequate number of independent directors.

For Apr-Sept, the company reported a net profit of INR 32.53 billion, up from INR 26.78 billion a year ago. The company reported revenues of INR 101.84 billion, up from INR 94.09 billion a year ago for Apr-Sept. The company approved the issuance of bonus shares to the shareholders in the ratio of two bonus equity shares for every one existing equity share. Consequently, the company has sought shareholder approval to increase its authorised share capital to INR 10 billion from INR 4 billion. Monday, shares of NMDC closed at INR 232.93 on the National Stock Exchange, down 1.3%.  End 

Edited by Deepshikha Bhardwaj

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.