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Hold NMDC; target of Rs 122: Sharekhan

Sharekhan recommended Hold rating on NMDC with a target price of Rs 122 in its research report dated August 08, 2022.

August 10, 2022 / 11:29 AM IST
 
 
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Sharekhan's research report on NMDC

Q1FY23 PAT at Rs. 1,442 crore (down 54.7% y-o-y; down 20.7% q-o-q) was 13% above our estimate led by beat in margins, lower-than-expected depreciation partially offset by lower other income and losses clocked by associates/JVs. EBITDA margin surprised positively with 11% q-o-q rise to Rs. 2434/tonne (22% above estimate) led by higher-than-expected iron ore sales realisation at Rs. 6,050/tonne and lower-than expected operating cost. NMDC has taken steep iron ore fine/lump price cut of 46%/36% since April 2022 and the same would impact realisation/margin from Q2FY23. NMDC received shareholders/creditors approval for demerger of Nagarnar Steel plant and the demerger process is expected to be completed by September 2022.


Outlook

We maintain our Hold on NMDC with lower PT of Rs. 122 (reflects cut in earnings estimate) as we expect weak earnings momentum going forward. Likely removal of iron ore/pellet/steel export duty could reduce gap between domestic iron ore and international iron ore price.

For all recommendations report, click here

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NMDC - 090822 - khan

Broker Research
first published: Aug 10, 2022 11:29 am

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