NMDC Ltd
NMDC Ltd
Commodities F&ONMDC is engaged in exploration and production of Iron Ore along with Diamond, production and sale of Sponge Iron and generation and sale of Wind Power.(Source : 202003 Annual Report Page No:119)
NMDC trades at an attractive PE of 10.4x with strong ROE of 23-26% over 3-5 years and healthy dividend yield of 2.83-3.74%, but analyst consensus is divided with 42.86% recommending sell. The commodity cyclicality risk and deteriorating working capital (43.8 to 67.4 days) warrant caution despite solid fundamentals.
Key Fundamentals
MidcapIndustrial MineralsMetals & MiningTechnical Indicators
Key Insights
Strengths
4- Stock is providing a good dividend yield of 3.85%.
- Company is expected to give good quarter
- Company has a good return on equity (ROE) track record: 3 Years ROE 23.6%
- Company has been maintaining a healthy dividend payout of 41.3%
Weaknesses
1- Working capital days have increased from 43.8 days to 67.4 days
Growth Rate
AI Analysis — Bull vs Bear
anthropic claude-opus-4.6 1d agoNMDC trades at an attractive PE of 10.4x with strong ROE of 23-26% over 3-5 years and healthy dividend yield of 2.83-3.74%, but analyst consensus is divided with 42.86% recommending sell. The commodity cyclicality risk and deteriorating working capital (43.8 to 67.4 days) warrant caution despite solid fundamentals.
- Attractive valuation at PE of 10.4x, significantly below broader market multiples, offering margin of safety for value investors
- Consistent ROE track record of 23-26% over 3-5 years demonstrates efficient capital allocation by management
- TTM sales growth of 34% indicates strong volume and price realization momentum in iron ore segment
- Healthy dividend yield of 2.83-3.74% with consistent payout ratio of 41.3%, providing downside protection through cash returns
- Compounded sales CAGR of 22% over 3 years reflects structural demand tailwind from India's infrastructure push
- Stock CAGR of 36% over 3 years shows strong price momentum and market re-rating of the business
- 10-year compounded sales CAGR of 17% demonstrates long-term business resilience across commodity cycles
- Price-to-book ratio of 2.28x is reasonable for a company generating 23%+ ROE, suggesting fair to undervalued territory
- 42.86% of analysts (9 out of 21) recommend selling, indicating significant institutional concern about near-term outlook
- Working capital days deteriorated sharply from 43.8 to 67.4 days, a 54% increase signaling operational inefficiency or receivable stress
- Compounded profit CAGR of only 4% over 5 years versus 16% sales CAGR suggests margin compression over medium term
- As a commodity producer, NMDC is exposed to iron ore price cyclicality — global slowdown could compress realizations significantly
- TTM profit growth of 14% lags TTM sales growth of 34%, indicating cost pressures or lower operating leverage
- 10-year stock CAGR of only 14% despite strong ROE suggests periodic de-rating during commodity downturns
- Government ownership introduces policy risk including potential divestment overhang and pricing interventions during inflationary periods
- Only 38.1% buy ratings (8 out of 21 analysts) reflects lack of strong institutional conviction at current levels
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 14h ago- Citi & Goldman Sachs sell ratings Jun 02
Citi holds Sell at ₹85 citing Q4 EBITDA miss and rangebound iron ore prices; Goldman Sachs retains Sell at ₹84 flagging sharp rise in receivables from NMDC Steel and RINL.
- Metals sector underperformance flagged Jun 14
Motilal Financial Services' Ruchit Jain advised avoiding NMDC, stating metals will not show outperformance in the short term and recommending a switch to banking/NBFC names.
- Iron ore sales declined in May Jun 01
Despite production growth, iron ore sales fell 6.91% YoY to 4.04 MT in May 2026 and cumulative Apr-May sales dropped 2.77% YoY to 7.72 MT.
- Karnataka division output declines Jun 01
Karnataka division reported a 3.65% YoY production decline to 1.32 MT in May, with sales falling 47.76% YoY to 0.70 MT.
- EBITDA margin compression in Q4 May 30
Operating profit margin fell to 23.31% in Q4 FY26 from 29.28% a year ago, largely impacted by one-off steel trading revenues; EBITDA was 2% below estimates.
- Steel capacity slowdown risk FY28-29 May 30
ICICI Securities warns steel capacity additions will likely slow in FY28/FY29, putting pressure on iron ore prices and NMDC's medium-term trajectory.
- Q4 profit surges 36% YoY Jun 01
NMDC delivered consolidated net profit of ₹2,017 crore in Q4 FY26 (+36% YoY), with revenue surging 62% YoY to ₹11,340 crore and EBITDA rising 29% to ₹2,640 crore.
- Record FY26 production at 53.2 MT May 31
Full-year iron ore production hit a record 53.16 MT (+21% YoY), with FY26 consolidated PAT of ₹7,421 crore (+11% YoY) and revenue of ₹32,071 crore (+34% YoY).
- Iron ore price hike effective Jun 3 Jun 01
NMDC raised Baila lump ore price by ₹200/tonne to ₹5,700 and fines by ₹150/tonne to ₹4,850, surprising the market ahead of monsoon season amid soft global prices.
- ₹3,000 Cr Vizag branded ore facility Jun 06
NMDC approved ~₹3,000 crore investment for a blending yard in Visakhapatnam to launch India's first branded iron ore, targeting completion in 2-2.5 years as part of its 100 MT capacity plan.
- May production up 19.9% YoY Jun 01
Iron ore production reached 5.31 MT in May 2026 versus 4.43 MT in May 2025, with cumulative FY27 production at 9.96 MT tracking in line with 60 MT guidance.
- Systematix & Motilal Oswal buy ratings Jun 01
Systematix raised target to ₹112 (21% upside) upgrading FY27/FY28 EBITDA by 10%/8%; Motilal Oswal retained Buy with ₹106 target implying 15% upside.
- Coal & critical minerals diversification May 30
Thermal coal production from Tokisud mine expected in Q2 FY27 at 0.75-1 MT; coking coal mine at Rohne (8 MTPA peak) to start in FY28; coal could add ₹5,000-8,000 crore revenue over FY27-29.
- NMDC Steel turns profitable Jun 01
NMDC Steel posted its first-ever net profit of ₹391.9 crore in Q4 FY26 versus a loss of ₹473.4 crore a year ago, with shares surging 18% to a 52-week high.
- ₹54 Cr block trades on exchanges Jun 24
Two block trades totalling ~₹108 crore executed in June — ₹54.18 crore at ₹86.30/share on Jun 24 and ₹54.47 crore at ₹89.95/share on Jun 9 — indicating institutional portfolio activity.
- FY27 capex guided at ₹6,000 Cr Jun 01
NMDC expects capital expenditure of ₹60 billion in FY27, up from ₹3,300 crore in FY26, with total spend of ₹40,000-50,000 crore planned to reach 100 MT by 2030.
- Q4 FY26 earnings call held Jun 1 May 26
NMDC held its analysts and investors conference call on June 1, 2026 led by CMD Amitava Mukherjee to discuss Q4 and full-year FY26 financial results.
- ₹2,000-3,000 Cr overseas acquisitions Jun 06
NMDC plans to spend ₹2,000-3,000 crore on overseas mining acquisitions in the current financial year, with some opportunities in advanced stages.
TL;DR: NMDC delivered a strong Q4 FY26 with 36% profit growth and record production volumes, supporting analyst upgrades from Systematix (₹112) and Motilal Oswal (₹106). However, sell ratings from Citi (₹85) and Goldman Sachs (₹84) flag concerns around EBITDA margin compression, rising receivables, and rangebound global iron ore prices. The company is executing well on its 100 MT growth roadmap with the Vizag branded ore facility, coal diversification, and aggressive capex, but near-term sales volume softness and potential steel demand slowdown in FY28-29 remain key risks. The trend is currently positive on production momentum, though sustainability of pricing power through monsoon season will be the next test.
Quarterly Results
| Mar 2023 | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 5,851 | 5,395 | 4,014 | 5,410 | 6,489 | 5,414 | 4,919 | 6,568 | 7,005 | 6,739 | 6,378 | 7,611 | 11,343 |
| Expenses | 3,689 | 3,401 | 2,824 | 3,403 | 4,388 | 3,074 | 3,533 | 4,196 | 4,953 | 4,260 | 4,385 | 5,467 | 8,700 |
| Operating Profit | 2,162 | 1,994 | 1,190 | 2,007 | 2,102 | 2,340 | 1,386 | 2,372 | 2,051 | 2,478 | 1,993 | 2,144 | 2,644 |
| OPM % | 37% | 37% | 30% | 37% | 32% | 43% | 28% | 36% | 29% | 37% | 31% | 28% | 23% |
| Other Income | 1,228 | 294 | 321 | 84 | 389 | 365 | 361 | 375 | 492 | 300 | 383 | 372 | 432 |
| Interest | 12 | 6 | 19 | 32 | 21 | 23 | 29 | 61 | 65 | 27 | 8 | 35 | 51 |
| Depreciation | 93 | 69 | 89 | 82 | 111 | 74 | 103 | 103 | 141 | 109 | 110 | 107 | 152 |
| PBT | 3,285 | 2,212 | 1,404 | 1,977 | 2,359 | 2,608 | 1,614 | 2,584 | 2,338 | 2,643 | 2,259 | 2,375 | 2,873 |
| Tax % | 31% | 25% | 27% | 26% | 40% | 25% | 26% | 27% | 37% | 26% | 26% | 26% | 30% |
| Net Profit | 2,272 | 1,653 | 1,026 | 1,482 | 1,410 | 1,969 | 1,205 | 1,880 | 1,477 | 1,968 | 1,698 | 1,757 | 2,027 |
| EPS in Rs | 2.58 | 1.88 | 1.17 | 1.69 | 1.61 | 2.24 | 1.38 | 2.14 | 1.68 | 2.24 | 1.93 | 2 | 2.31 |
Profit & Loss
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 12,356 | 6,456 | 8,828 | 11,615 | 12,153 | 11,699 | 15,370 | 25,965 | 17,667 | 21,308 | 23,906 | 32,071 |
| Expenses | 4,591 | 3,771 | 5,233 | 5,812 | 5,228 | 5,697 | 6,580 | 13,338 | 11,613 | 14,014 | 15,755 | 22,811 |
| Operating Profit | 7,765 | 2,685 | 3,595 | 5,803 | 6,925 | 6,003 | 8,790 | 12,626 | 6,054 | 7,294 | 8,150 | 9,260 |
| OPM % | 63% | 42% | 41% | 50% | 57% | 51% | 57% | 49% | 34% | 34% | 34% | 29% |
| Other Income | 2,155 | 1,682 | 910 | 667 | 588 | 416 | 351 | 716 | 2,004 | 1,087 | 1,591 | 1,488 |
| Interest | 0 | 66 | 21 | 37 | 40 | 10 | 17 | 39 | 75 | 78 | 178 | 121 |
| Depreciation | 173 | 218 | 197 | 257 | 279 | 295 | 229 | 288 | 336 | 351 | 420 | 477 |
| PBT | 9,747 | 4,084 | 4,287 | 6,176 | 7,194 | 6,114 | 8,896 | 13,016 | 7,646 | 7,952 | 9,143 | 10,149 |
| Tax % | 34% | 34% | 40% | 38% | 36% | 41% | 30% | 27% | 28% | 30% | 28% | 27% |
| Net Profit | 6,351 | 2,544 | 2,543 | 3,808 | 4,617 | 3,573 | 6,277 | 9,429 | 5,601 | 5,567 | 6,520 | 7,450 |
| EPS in Rs | 5.34 | 2.14 | 2.68 | 4.01 | 5.03 | 3.89 | 7.14 | 10.72 | 6.37 | 6.34 | 7.43 | 8.47 |
| Div. Payout % | 53% | 171% | 64% | 36% | 37% | 45% | 36% | 46% | 35% | 38% | 44% | 41% |
Balance Sheet
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 396 | 396 | 316 | 316 | 306 | 306 | 293 | 293 | 293 | 293 | 879 | 879 |
| Reserves | 31,870 | 28,784 | 22,266 | 24,101 | 25,738 | 27,367 | 29,591 | 17,725 | 22,328 | 25,363 | 28,817 | 33,183 |
| Borrowings | 0 | 1,497 | 0 | 500 | 364 | 566 | 2,000 | 1,800 | 2,128 | 3,359 | 4,276 | 6,407 |
| Other Liabilities | 2,197 | 2,079 | 3,201 | 3,774 | 3,483 | 3,056 | 5,045 | 5,094 | 5,204 | 6,646 | 7,035 | 7,851 |
| Total Liabilities | 34,464 | 32,756 | 25,784 | 28,691 | 29,891 | 31,294 | 36,930 | 24,912 | 29,953 | 35,661 | 41,007 | 48,320 |
| Fixed Assets | 1,468 | 2,058 | 2,095 | 3,457 | 3,512 | 3,810 | 3,933 | 3,662 | 3,199 | 3,377 | 5,038 | 5,856 |
| CWIP | 7,801 | 9,747 | 11,855 | 12,545 | 13,819 | 15,530 | 17,158 | 1,333 | 1,998 | 3,235 | 4,737 | 6,749 |
| Investments | 319 | 592 | 612 | 673 | 859 | 910 | 875 | 895 | 940 | 956 | 978 | 1,372 |
| Other Assets | 24,876 | 20,359 | 11,221 | 12,016 | 11,701 | 11,045 | 14,964 | 19,022 | 23,816 | 28,094 | 30,253 | 34,344 |
| Total Assets | 34,464 | 32,756 | 25,784 | 28,691 | 29,891 | 31,294 | 36,930 | 24,912 | 29,953 | 35,661 | 41,007 | 48,320 |
Cash Flow
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 3,999 | 2,502 | 2,109 | 3,376 | 4,002 | 2,126 | 7,266 | 6,942 | 1,838 | 7,394 | 1,894 | 4,996 |
| Investing | -517 | 3,645 | 5,171 | -1,865 | -789 | -313 | -4,316 | -3,214 | 202 | -6,076 | 306 | -3,842 |
| Financing | -3,449 | -6,290 | -7,249 | -1,557 | -3,201 | -1,753 | -2,591 | -4,067 | -2,067 | -1,302 | -2,225 | -1,092 |
| Net Cash Flow | 33 | -144 | 31 | -46 | 11 | 60 | 359 | -339 | -28 | 16 | -25 | 63 |
| Free Cash Flow | 1,185 | -1,073 | -211 | 1,318 | 1,996 | -278 | 5,644 | 5,743 | 590 | 5,547 | -1,336 | 1,826 |
| CFO/OP | 91 | 157 | 102 | 99 | 95 | 73 | 111 | 89 | 65 | 126 | 54 | 85 |
Ratios
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 52 | 45 | 43 | 46 | 43 | 69 | 51 | 42 | 90 | 60 | 118 | 105 |
| Inventory Days | — | — | — | — | — | — | — | — | — | — | — | 170 |
| Days Payable | — | — | — | — | — | — | — | — | — | — | — | 27 |
| Cash Conversion Cycle | 52 | 45 | 43 | 46 | 43 | 69 | 51 | 42 | 90 | 60 | 118 | 247 |
| Working Capital Days | 101 | 7 | 3 | -4 | 9 | 53 | -16 | 30 | 94 | 9 | 55 | 67 |
| ROCE % | 32% | 14% | 16% | 25% | 28% | 23% | 30% | 50% | 29% | 31% | 30% | 28% |
Documents
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Company Information
NMDC is engaged in exploration and production of Iron Ore along with Diamond, production and sale of Sponge Iron and generation and sale of Wind Power.(Source : 202003 Annual Report Page No:119)