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Informist, Wednesday, May 28, 2025

 

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--NMDC: Expect 2.5-3.0 mln tn pellet sales in FY26
--NMDC: Have enough infra to support 55 mln tn iron ore output aim for FY26
--NMDC: Most of the capex to be funded via internal accruals
--NMDC: Trying to implement index-based iron ore pricing method
--NMDC: Iron ore prices stabilising in global markets
--NMDC: Large capex plans in progress to reach 100 mln tn capacity by FY30
--NMDC: FY26 sales volume guidance at around 54 mln tn-55 mln tn
--NMDC: FY25 capex was INR 37 bln
--NMDC: Australian arm Legacy Iron ops stabilised, may turn profitable FY26
--NMDC: Aiming 55 mln tn iron ore production in FY26
--NMDC: See FY26 capex much higher than FY25
--CONTEXT: Comments by NMDC management in post-earnings analyst concall
--NMDC: Actively looking for assets abroad

 

By Narayana Krishna and Arya S Biju

 

HYDERABAD/MUMBAI - NMDC Ltd. is aiming to sell around 54-55 million tonnes of iron ore in 2025-26 (Apr-Mar) and the sales momentum during the first two months of the current financial year is encouraging so far, the company's management said in a post-earnings conference call on Wednesday. For FY25, NMDC sold 44.40 million tonnes of iron ore, down marginally on year, and missing the 50-million-tonne aim.

 

"I can assure you, this year will be fully action packed. We will comfortably cross the 55 million tonne (output target for FY26), setting a stone to reach the long-term goal of 100 million tonnes," Chairman and Managing Director Amitava Mukherjee said.

 

On Tuesday after market hours, NMDC reported a net profit of INR 14.96 billion for the March quarter, up 2.33% on year but much lower than the analysts' expectations. However, the company reported a better-than-expected revenue for the quarter at INR 69.53 billion, up 7.38% on year.

 

NMDC's management said disruptions in operations due to a workers' agitation impacted overall full year production with a production loss of over 40 days. NMDC has iron ore mining operations in Chhattisgarh and Karnataka.

 

The management said the company currently has environmental clearances to produce up to 55 million tonnes of iron ore. The long-term capital expenditure plan worth INR 700 billion, that was announced earlier, is in progress to expand the capacity and to create other infrastructure, it said.  

 

NMDC's management said the capital expenditure for FY25 was INR 37 billion, and it may be higher in FY26 at around INR 40 billion. The company expects capex to go up significantly higher from FY27 onwards, as majority of the expansion plans pick up pace. Most of the planned capex will be funded through internal accruals, the company said. 

NMDC said it is looking to diversify into select 10 minerals, which include coal and cocking coal. It is also looking to acquire mineral assets abroad actively, it said, but didn't mention any specifics. It expects pellet sales to be between 2.5-3.0 million tonnes in FY26. 

 

The company said its Australian subsidiary Legacy Iron Ore Ltd. is expected to turn profitable in FY26.

INDEX PRICING 
NMDC is planning to implement index-based iron ore pricing for its products, management said. NMDC initiated an experiment with an index-based iron ore pricing mechanism in April, in line with global benchmarks such as the London Metal Exchange and Platts. The move aims to facilitate more transparent, market-linked price discovery and simplify royalty calculations, a step in reforming the pricing structure for the domestic market. As of now, NMDC fixes its prices manually on a monthly basis, based on the domestic demand and global price trends.

The management said the new method is aimed at applying dynamic prices to iron ore products, and in-line with market momentum. The company said iron ore prices are stabilising globally and it expects domestic pricing to follow suit. At 1330 IST, shares of NMDC traded at INR 70.68 on the National Stock Exchange, down 2.9% from its previous close.  End

 

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

 

Edited by Tanima Banerjee

 

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