NMDC share price jumps over 7% on robust Q3 results; here's what brokerages say

NMDC share price jumped over 7% to touch a 52-week high following robust Q3 results. The state-owned company's Q3 numbers almost exceeded the Street estimates. NMDC share price today opened at ₹250.10 apiece on BSE and touched an intraday high of ₹252.65 and an intraday low of ₹244.55.

According to Rajesh Bhosale, Equity Technical and Derivative Analyst, Angel One, post-quarterly earnings, the stock has seen a strong gap-up opening, and we are seeing strong volume in this move. Expect this move to continue in the near term, and traders can opt for a buy-on-dip approach. The bullish gap left around ₹238 is likely to act as support, whereas ₹264 is resistance.

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NMDC said on Wednesday that its consolidated net profit for the December quarter increased by 62% to ₹1,469.73 crore, mostly due to greater income. In the same time last year, it recorded a net profit of ₹903.89 crore.

Over the previous year, the company's total income increased to ₹5,746.47 crore from ₹3,924.75 crore.

In the third quarter of the current fiscal year, NMDC's expenses were ₹3,516.78 crore as compared to ₹2,693.01 crore in the same period last year. The company's board has also decided to issue an interim dividend of ₹5.75 per equity share for the 2023–2024 fiscal year, with February 27 chosen as the record date.

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Here' what brokerages say 

ICICI Direct Research 

The brokerage said that iron ore sales volume was 11.4 million tonne (up 19% YoY and QoQ) and that the overall operating income for the quarter was ₹5,410 crore (up 45% YoY & 35% QoQ). 

With comparable EBITDA margins of 37% (up 644 bps YoY), reported EBITDA for the quarter was ₹2,007 crore. In Q3FY24, EBITDA/tonne was ₹1,762/tonne, up from ₹1,244/tonne in Q2FY24 and ₹1,191/tonne in Q3FY23. PAT increased by 63% YoY and 45% on a QoQ basis to ₹1484 crore in Q3FY24. An interim dividend of ₹5.75 per share was announced by the firm.

“Results for the quarter was broadly in-line with our estimates as topline’s growth was driven by higher sales volume and increase in iron ore realisation. PAT for the quarter included an exceptional cost item of ₹252 crore towards levies for diversion of forest land at its iron ore mines in the state of Karnataka. We remain positive on the stock amidst healthy volume growth in offerings and considerable price hikes in the recent past resulting in strong profitability outlook going forward,” the brokerage said.

Motilal Oswal Financial Services

According to the brokerage's review, revenue was ₹5,400 crore, which was higher than the brokerage's forecast of ₹4,850 crore by 45% YoY and 35% QoQ. The quarter's blended ASP was ₹4,748/t, up 13% QoQ and 22% YoY. The ASP for 3QFY24 exceeded the brokerage's forecast of ₹4,245/t by ₹863/t.

"In line with other steel manufacturers increasing their domestic presence, SAIL has announced a planned capacity expansion, which is expected to take its total capacity to 35mt by FY31E. Capacity expansion across the sector will provide a much-needed thrust to NMDC.

NMDC is undertaking numerous capex programs, which will eventually increase its mining capacity to 70-75mt from its current 50mt. NMDC ASP has moved in tandem with international iron ore prices. The ore prices across the globe have remained strong in 3QFY24. This, along with strong domestic demand, has led to multiple price hikes in the quarter," the brokerage explained. 

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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.