NMDC Seen Reaching Rs 97 Target: Prabhudas Lilladher Recommendation

NMDC Reports Inline Q4FY26 Performance

NMDC has reported a strong set of numbers for the fourth quarter of fiscal year 2026, driven by a sharp recovery in iron ore sales volumes and a higher contribution from its trading business. The company's consolidated revenue grew by 62% year-over-year, with iron ore sales volumes increasing by 21% year-over-year to 15.3 million tons. The net sales revenue (NSR) remained strong due to improved premiums and minor hikes taken during the quarter.

NMDC's performance was also boosted by the sale of higher quantities of hot rolled coils (HRC) to support its National Steel subsidiary (NSL). However, this trend is unlikely to continue. Looking ahead, the company has maintained its FY27E iron ore production guidance at 60 million tons and reiterated its long-term target of achieving 100 million tons capacity by 2030, supported by the ramp-up of Deposit-4, Deposit-13, and the extension of existing mines.

The company's capital expenditure (capex) guidance for FY27 stands at approximately INR 60 billion, while annual capex could rise to INR 70-100 billion over the next few years as NMDC undertakes evacuation capex to support mining ramp-up.

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Stock Outlook

At the current market price, NMDC is trading at 5.4x and 5.2x the expected earnings before interest, taxes, depreciation, and amortization (EBITDA) for FY27 and FY28, respectively. Despite this, the research firm has maintained an 'Accumulate' rating on the stock, with a revised target price of INR 97, up from INR 95 earlier. This revised target price reflects a higher multiple of 5.5x the expected EBITDA for March 2028, driven by higher iron ore pricing, a focus on higher volumes, and diversification into newer businesses with healthy profit margins such as pellets and coal mining.

Note: The revenue growth and iron ore sales volumes are year-over-year comparisons.

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