Q3FY21 Result Update - NMDC - ICICI Direct

NMDC reported an operationally steady set of Q3FY21 numbers. For the quarter, NMDC's topline came in line with our estimates while EBITDA & PAT came in higher than our estimates. For Q3FY21, NMDC reported revenue of operations at Rs. 4355 crore (up 45% YoY, 95% QoQ), broadly in line with our estimate of Rs. 4540 crore. Iron ore sales volume was at 9.3 MT (up 10% YoY and 41% QoQ) (our estimate: 9.4 MT). EBITDA came in at Rs. 2767 crore (up 74% YoY, 169% QoQ) (our estimate: Rs. 2546 crore). EBITDA/tonne came in at Rs. 2982/tonne, higher than our estimate of Rs. 2700/tonne (Rs. 1892/tonne in Q3FY20 and Rs. 1560/tonne in Q2FY21). Ensuing PAT for the quarter was at Rs. 2109 crore, higher than our estimate of Rs. 1960 crore.

Valuation & Outlook

Over the next couple of years, uptick in volumes augurs well for NMDC. Going forward, in our assumptions, we factor in an additional charge of 22.5% with respect to allocation premium for all mines from FY22 onwards. This is except for the Kumaraswamy mines where we have factored the allocation premium from October 2022 when the environmental clearance of the mine is renewed. We introduce FY23E estimates and roll over our valuations to FY23. We value the stock on an SoTP basis and arrive at a target price of Rs. 125 (earlier target price of Rs. 100). We maintain out HOLD recommendation on the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_NMDC_Q3FY21.pdf

Shares of NMDC LTD. was last trading in BSE at Rs.112.45 as compared to the previous close of Rs. 113.45. The total number of shares traded during the day was 458900 in over 2736 trades.

The stock hit an intraday high of Rs. 114.4 and intraday low of 111.8. The net turnover during the day was Rs. 51949476.

Source : Equity Bulls

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