NMDC Ltd.'s muted growth in the first quarter of fiscal 2027 has prompted Citi to cut its target price to Rs 80 from Rs 85. The company posted a 1.9% rise in its net profit to Rs 2,006 crore in the quarter from Rs 1,968 crore in the corresponding period last year.
Revenue remained nearly flat at Rs 6,795 crore, while EBITDA declined 0.4% to Rs 2,468 crore from Rs. 2,478 crore, and margin contracted to 36.3% from 36.8%.
The company posted an iron ore sales volume of 117.30 lakh tonnes in the quarter, aggregating up to Rs 6,508 crore. The sales were 6% higher than the year-ago period.
Despite the higher volumes and sales, Citi has maintained a 'sell' call on the stock, as it noted higher costs offset volume and realisation gains.
Segment wise, revenue from iron ore rose 9.7% to Rs 6,802.12 crore in the April to June quarter, while pellet, pther minerals, products, services dropped to Rs 287.75 crore.
However, Citi flags medium-term iron ore headwinds as domestic prices are expected to remain range-bound, while global prices will edge lower.
Additionally, the brokerage said that since iron ore dispatches only rose 1% year-on-year, the company will have to pace up to attain the required run rate for the rest of the fiscal year.
Lastly, supply growth and weak Chinese demand further cloud outlook for the PSU, as per Citi.
NMDC (Q1 FY27, Consolidated YoY)
- Revenue up 0.8% to Rs. 6,795 crore versus Rs. 6,739 crore.
- EBITDA down 0.4% to Rs. 2,468 crore versus Rs. 2,478 crore.
- EBITDA margin at 36.3% versus 36.8%.
- Net profit up 1.9% to Rs. 2,006 crore versus Rs. 1,968 crore.
NMDC Share Price History
NMDC shares have risen 1.48% year-to-date, and 21.61% in the last 12 months. On Friday, the stock closed 0.71% lower at Rs 84.40.
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