NMDC Ltd.'s volume growth fell to its lowest in nearly a decade as production of iron ore from its Donimalai mine remain suspended and private peers in Odisha dump excess output ahead of expiry of their mining leases.
Volumes fell 10.2 percent year-on-year in financial year ended March, the biggest drop since 2009-10, according to data compiled by BloombergQuint from an investor presentation of the nation's largest iron ore miner.
The Donimalai mine in Karnataka, which contributed 17 percent of the state-run miner's total output in financial year 2017-18, remained shut since the first week of November. The shutdown stems from state government's decision to impose 80 percent premium on iron ore sales from the mine. That, along with excess production by miners before their licences expire in March next year, is only adding to NMDC's woes.
Yet, analysts are bullish. Twelve of the 19 analysts tracking the stock have a ‘Buy' recommendation. That's a potential upside of more than 17 percent, according to Bloomberg data. The proportion of ‘Buy' rating on the stock has increased from 30.8 percent last year to 63.2 percent.
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