Motilal Oswal has given Buy recommendation for NMDC recommended buy rating on the stock with a target price of Rs 216 in its research with a target price of Rs. 216 in its research report issued on Mar 08, 2022

Motilal Oswal’s research report on NMDC

NMDC has announced an increase in iron ore prices by INR400/t for both fines and lumps, marking a third price hike within 4QFY22 and raising the offer prices to INR4,960/t and INR6,000/t, respectively. The price hikes have been driven by strong steel and international pellet prices. The price of DR-CLO has been increased by INR480/t raising the offer price to INR7,200/t. These have resulted in a cumulative price increase of INR900/t for fines and INR1,100/t for lumps. We expect the iron ore prices to taper going forward into FY23 led by better market balance.

Outlook

Our SoTP-based TP of INR216 (up from INR214) comprises: a) INR187 for the core iron ore mining business, factoring in higher ASP and volume post the current price hike and valuing the same at 4.5x FY23 EV/EBITDA and (b) INR29 for the steel CWIP at 50% discount.

More Info

At 17:30 NMDC was quoting at Rs 153.25, up Rs 0.60, or 0.39 percent.

It has touched an intraday high of Rs 153.95 and an intraday low of Rs 150.30.

It was trading with volumes of 264,019 shares, compared to its thirty day average of 671,805 shares, a decrease of -60.70 percent.

In the previous trading session, the share closed down 0.33 percent or Rs 0.50 at Rs 152.65.

The share touched its 52-week high Rs 213.15 and 52-week low Rs 122.05 on 12 May, 2021 and 25 March, 2021, respectively.

Currently, it is trading 28.1 percent below its 52-week high and 25.56 percent above its 52-week low.

Market capitalisation stands at Rs 44,911.53 crore.

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