*NMDC:Higher Ore Prices in Q4* TP 116/ Feb Expiry
(This is not a trade recommendation)
BEST BUY IN METALS:TP 180+ ( after splendid Q3, set for Bumper Q4)
1) As against average realisation of INR 2578/Ton in Q3, NMDC is fetching *25% higher realisation* at INR 3150/Ton in Q4. _Cost of production is FIXED at INR 770/Ton._
2) NMDC already reported NP of 1367 Cr in Q3 Vs 703 Cr in Q2.
Q4 NP should be more than 1700 Cr
3) BV 95.4
4) Stock is tdg @ 6.5xFY20eEPS
5) NMDC paid 5.29/Sh Interim Div. Expect Final Div of 5/Sh
6) NMDC GLOBALLY is amongst LOWEST cost producer at par with Rio Tinto, BHP (61% ebidta margin)
FUTURE OUTLOOK:
A) Allotted 2 merchant mines with capacity of 10.34/million Ton
B) 3 million Ton Steel plant: *Will have 31.6% ebidta margin and 29.7© Profit Margin*. Production can start in H2 of FY21
9m Div Yield is 4.7%. With Expected Final Div, total Div Yield should be 9%+