Motilal Oswal: NMDC’s Earnings Outlook Strengthens Further
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Motilal Oswal Report
NMDC Ltd.’s volume outlook has strengthened further with the resumption of Donimalai mine expected by December-end.
Strong volume trend (sales of 3.3 million tonne in November 2020, up 18% YoY), coupled with strong iron ore pricing (hike of Rs 500/tonne in December 2020), should drive near-term earnings.
Resumption of the Donimalai mine should drive 11% Ebitda growth in FY22E on the back of a 18% volume growth.
The government’s proposal to levy a premium on NMDC on its mining leases has emerged as a key overhang on the stock.
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