Sharekhan has given Buy recommendation for NMDC with a target price of Rs. 200 in its research report issued on Feb 10, 2022

Sharekhan’s research report on NMDC

Q3FY22 PAT of Rs. 2,050 crore (down 12% q-o-q) beat ours and the street’s estimate led by better-than-expected margins of Rs. 3,652/tonne (down 23% q-o-q) and higher other income. Robust margin performance was driven by a 19% q-o-q decline in operating cost on per tonne basis. Strong 9.6% y-o-y rise in iron ore sales volume to 9.8 mt (in line with expectations). Steel plant demerger expected by March-April 2022 in case of waiver of creditors meeting. Steep discount of India’s iron ore price to international price and upbeat sales volume guidance provides an upside to our FY23-24 earnings estimates.

Outlook

We maintain a Buy rating on NMDC with an unchanged PT of Rs. 200, noting the stock’s inexpensive valuation of 2.7x its FY2023E EV/EBITDA for the core business and a high dividend yield of 9-10%. Steel plant demerger would unlock value for NMDC.

More Info on NMDC

At 17:30 NMDC was quoting at Rs 144.70, down Rs 7.95, or 5.21 percent.

It has touched an intraday high of Rs 148.50 and an intraday low of Rs 144.00.

It was trading with volumes of 453,210 shares, compared to its thirty day average of 653,630 shares, a decrease of -30.66 percent.

In the previous trading session, the share closed up 2.18 percent or Rs 3.25 at Rs 152.65.

The share touched its 52-week high Rs 213.15 and 52-week low Rs 114.45 on 12 May, 2021 and 17 February, 2021, respectively.

Currently, it is trading 32.11 percent below its 52-week high and 26.43 percent above its 52-week low.

Market capitalisation stands at Rs 42,405.87 crore.

 

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