NMDC Q3 Results: Net Profit Rises 53% On Cost Cuts
NMDC Ltd.’s profit jumped in the third quarter, aided by cost cuts.
Net profit of the nation’s largest iron ore miner surged 53.2% year-on-year to Rs 2,108.9 crore in the quarter ended December, according to an exchange filing.
Revenue rose 44.8% over the preceding year to Rs 4,355 crore. That, the company’s investor presentation said, was the best-ever turnover since inception. Its previous bests were Rs 3,649 crore in the third quarter of 2018-19, and Rs 3,884 crore in the fourth quarter of 2013-14.
NMDC’s operating profit in the third quarter jumped to the highest in at least eight years. The state-run company’s earnings before interest, tax, depreciation and amortisation jumped 73.9% year-on-year to Rs 2,768.5 crore in the third quarter.
Sumit Deb, chairman and managing director at NMDC, expects the unitary operating income to remain at similar levels if not improve in the fourth quarter due to price moderation.
The company, which cut lumps and fines prices by 10% and 12%, respectively, in February, doesn’t plan to cut prices further due to robust demand, Deb told BloombergQuint in an interview. That, even as miners in Odisha continue to ramp-up their production capacity, he said.
JPMorgan remained overweight on NMDC with a price target of Rs 150, up from Rs 126 earlier. “Iron ore prices are unlikely to be the catalyst for continued stock price outperformance. In our view, the next two set of catalysts are — the steel plant separation which, while being talked about, has not yet happened, and volume growth visibility,” the research firm said in a post-earnings research note.
But the Donimalai mine in Karnataka, it said, has not yet ramped up and uncertainty remains on the mine restart. “Key downside risks to our overweight rating and price target include a large decline in iron ore prices and declines in sales volumes.”
Watch the interaction with Sumit Deb here: