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Informist, Monday, Feb. 10, 2025

By Narayan Krishna and Aman Aryan

HYDERABAD/MUMBAI –

The Country's largest iron ore mining company NMDC Ltd. Monday said it does not expect any major increase in prices of the commodity in the medium term. In a post-earnings conference call with analysts, the company said it is not very optimistic about price hikes given the current steel demand and pricing globally.

The management said iron ore prices are fluctuating daily due to stress in the steel demand and pricing and it is difficult to predict the pricing in the long-term. NMDC increased its iron ore product prices twice in Oct-Dec, totalling INR 1,000 per tonne. This helped the company to report decent growth in its financials for the quarter.

On Thursday, NMDC reported a 30% on-year growth in its net profit to INR 19.44 billion for Oct-Dec, lower than the analysts' estimates of INR 20.34 billion. The company posted a 20.7% on-year increase in its revenue for the quarter to INR 65.31 billion.

The management said the Jan-Mar quarter going to be another big quarter for the company as it is expecting 16 million tonnes of sales. The company said it has already done over five million tonnes in January and is expecting better numbers in the next two months.

On a cumulative basis, NMDC reported a sales volume of 31.74 million tonnes in Apr-Dec, down from 31.94 million tonnes a year ago. For Oct-Dec, NMDC produced 13.29 million tonnes of iron ore and sold 11.94 million tonnes. 

NMDC is expecting its iron ore output at around 53 mln tonnes in 2025-26 (Apr-Mar) and at 60 million tonnes in FY27, the company management said. NMDC, which produced 45 million tonnes in FY24, has set a target to produce 50 million in FY25. 

Earlier, the company had set a target to achieve 100 million tonnes production capacity in the next 4-5 years and had outlined INR 700 billion capital expenditure to meet the target. The company expects its capital expenditure in FY25 to be around INR 40 billion and higher than this in FY26. 

NMDC management said it is expecting to increase the iron ore output at Karnataka's Kumaraswamy mines and Chhattisgarh mines in coming quarters, which will help the company to achieve its sales and output targets.

LAND BUY
NMDC has signed an agreement with Rashtriya Ispat Nigam Ltd. to buy 1,167 acres of land at Visakhapatnam and paid INR 15.02 billion during the December quarter, the management said. The company plans to develop India's largest dump yard to store the iron ore. NMDC planning to transport the iron ore from its Chhattisgarh mines via a slurry pipeline to this yard, which may help the company to store the iron ore in larger quantity. Rashtriya Ispat, a public sector entity owns and operates Visakhapatnam steel plant, sources iron ore from NMDC.

At 1511 IST, shares of NMDC were at INR 64.25 on the National Stock Exchange, down 3.6% from its previous close.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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