ICICI Securities: NMDC Q1 Review - Demerger Of Steel Plant Can Allow Value Unlocking
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ICICI Securities Report
NMDC Ltd. Q1 FY21 Ebitda/te surprised on the back of better cost control, despite volumes declining 29% YoY to 6.28 million tonne.
NMDC board has accorded in-principle approval to demerge the steel unit in a ‘time bound manner’.
This can unlock significant value for the minority investors as hardly any value gets attributed to Rs 160 billion of work in progress in NMDC’s balance sheet on account of the steel plant.
Series of price hikes (approximately Rs 700/tonne post Q1 FY21) rebasing expected Ebitda/te, possible resolution of Karnataka mining remain additional tailwinds.
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