Please refer to important disclosures at the end of this report
NMDC since inception involved in the exploration of wide range of minerals
including iron ore, copper, rock phosphate, lime stone etc. It is India's single
largest iron ore producer, presently producing about 30 million tonnes of
iron ore from 3 fully mechanized mines. Over the years of its operations,
NMDC was consistent and could sustain in the cyclical and high risk industry.
In FY19 the company’s revenues increased by 4.6% and PAT surged by 22%
to `4,642. NMDC can increase production from existing mines and supply
iron ore to the upcoming 3mtpa steel plant at Nagarnar. Further, The
management has guided that the steel plant is likely to be commissioned by
H2FY20. As compared to the earlier aggregate capex guidance of `15,500
crore for steel plant, the revised guidance stands at `18,500 crore. Along
with this, the Karnataka government has renewed the lease (expired on 3rd
Nov’18) of NMDC’s Donimalai mine for 20 years with a condition of
payment of 80% of sale value as lease rental. NMDC is further expected to
win the iron ore bid in Odisha.
These growth prospects when executed will bolster the company’s operations
and profits. NMDC is any way manages to control cost thereby widening
operating profit margin. The company’s cash flow generation is constant and
debt is almost nil. Currently the stock is trading at 1.3x of its book value and
generates 18.4% return on equity. It also pays regular dividend of nearly
30%. Hence BUY.
CMP `112
Reuters Code
BSE Sensex
Face Value (`)
Market Cap (` cr)
52 Week High / Low
Avg. Daily Volume
Jaikishan Parmar
022 3935 7600 Ext: 6810
Others |Mining
July 15, 2019
NMDC Ltd|Mining
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Disclosure of Interest Statement NMDC Ltd
1. Financial interest of research analyst or Angel or his Associate or his relative No
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3. Served as an officer, director or employee of the company covered under Research No
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Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)