Earnings Outlook
Price hikes, volumes to lift NMDC Oct-Dec sales, PAT
This story was originally published at 22:34 IST on 4 February 2025
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By Narayana Krishna
HYDERABAD - Public sector iron ore major NMDC Ltd is expected to report a robust performance for the December quarter led by price hikes and volume growth, according to analysts.
NMDC announced price hikes twice during the quarter totalling INR 1000 per tonne, while its volumes for the quarter were up nearly 5% on year at 11.9 million tonnes, helping the company post decent realisation, analysts said.
The company is expected to report a 36% on-year and 60% sequential rise in its Oct-Dec net profit at INR 20.3 billion, while its revenue is likely to rise 20% on year and 35% sequentially to INR 64.8 billion, according to an average of estimates of nine brokerages.
Analysts' estimates for NMDC's net profit range from INR 18.0 billion – the lowest by Motilal Oswal Financial Services Ltd. – to INR 22.4 billion, the highest by Systematix Shares and Stocks India Ltd. Revenue projections range from INR 62.1 billion, the lowest by Prabhudas Lilladher Pvt. Ltd, to INR 67.7 billion, the highest by JM Financial Institutional Securities Ltd.
The company is scheduled to announce its Oct-Dec earnings on Thursday.
Yes Securities said NMDC's revenue for the latest quarter is seen growing 20% on year and 32% sequentially to INR 65.2 billion led by high volumes and improved realisations.
Brokerage Nuvama Wealth Management Ltd. expects NMDC's average price realisation is likely to improve by INR 742 to INR 5,422 per tonne, while Prabhudas Lilladher expects it at INR 5,120 per tonne.
Analysts' projections for NMDC's December quarter were almost similar based on the company's total sales volumes and price realisation, helping the company post better earnings before interest, tax, depreciation and amortisation per tonne.
Brokerages JM Financial and Kotak Institutional Equities projected NMDC's EBITDA per tonne at INR 2,149 and INR 2,116, respectively led by price hikes. Prabhudas Lilladher expects EBITDA per tonne at INR 2,061. The average of estimates of eight brokerages available for NMDC's Oct-Dec EBITDA pegged at INR 25.02 billion.
Assigning a 'buy' rating to the stock with a price target of INR 85 per share, Motilal Oswal said the management's commentary on Karnataka's mining royalty bill and progress of capacity expansion plans are the key things to watch out for.
Following are the Oct-Dec earnings estimates for NMDC Ltd. based on reports from nine brokerage firms in descending order by the estimate of net profit:
Brokerage firm | Net sales | Net profit | EBITDA |
|
| ||
Systematix Shares and Stocks (India) Ltd | 66,300.00 | 22,400.00 | 27,400.00 |
YES Securities (India) Ltd | 65,127.00 | 21,013.00 | 25,975.00 |
Sharekhan Ltd | 64,510.00 | 20,930.00 | ---- |
Kotak Institutional Equities | 64,205.00 | 20,632.00 | 25,260.00 |
Elara Securities (India) Pvt Ltd | 62,686.00 | 20,261.00 | 24,509.00 |
Nuvama Wealth Management Ltd | 64,700.00 | 20,200.00 | 24,300.00 |
JM Financial Institutional Securities Pvt Ltd | 67,712.00 | 19,988.00 | 25,661.00 |
Prabhudas Lilladher Pvt Ltd | 62,100.00 | 19,600.00 | 24,700.00 |
Motilal Oswal Financial Services Ltd | 66,279.00 | 18,000.00 | 22,373.00 |
Average | 64,846.56 | 20,336.00 | 25,022.25 |
On Tuesday, shares of NMDC ended at INR 63.99 on the National Stock Exchange, up 2.7% from the previous close. NMDC shares lost over 17.6% compared to Nov. 11, when the company announced its Jul-Sept earnings. End
Edited by Avishek Dutta
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