NMDC Stock Seen Reaching Rs 106: Motilal Oswal Recommendation

NMDC Sees Strong Revenue Growth in 4QFY26

Motilal Oswal's research report highlights the strong financial performance of National Mineral Development Corporation (NMDC) in the fourth quarter of fiscal year 2026. The company's consolidated revenue stood at INR113 billion, driven by third-party value-added sales of INR30 billion during the quarter. This growth was largely attributed to a temporary HR coil trading arrangement undertaken to support the working capital requirements of NMDC Steel. However, management clarified that this was a one-off transaction and will not be repeated in the future.

Revenue and Production Numbers

NMDC's revenue, excluding third-party sales, stood at INR84 billion, growing 20% year-over-year (YoY) and 22% quarter-over-quarter (QoQ), driven by better volumes during the quarter. Iron ore production increased to 16.3 million tonnes (mt), a 22% YoY and 11% QoQ growth, while sales were at 15.3 mt, a 21% YoY and QoQ growth. The blended average selling price (ASP) for the quarter stood at INR5,488 per tonne, flat YoY and QoQ, while iron ore ASP stood at INR4,873 per tonne, a 3% YoY decline and 3% QoQ increase in 4QFY26.

Read also: SpaceX Seeks Record $75 Billion IPO, Potentially Positioning Elon Musk as the World's First Trillionaire

Key Financial Metrics

NMDC's earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at INR25.3 billion, a 24% YoY and 25% QoQ growth, largely in line with Motilal Oswal's estimate. EBITDA per tonne improved to INR1,656, a 2% YoY and 4% QoQ increase, against the estimate of INR1,730 per tonne during the quarter. The company's earnings per adjusted tax (APAT) for the quarter stood at INR19.5 billion, a 32% YoY and 19% QoQ growth, against the estimate of INR21 billion during the quarter.

Outlook and Recommendation

At the current market price (CMP), NMDC trades at 6.1x EV/EBITDA and 1.7x on price-to-book value (P/BV) on FY28 estimate. Motilal Oswal maintains a BUY rating on NMDC with a target price (TP) of INR106, based on 7x EV/EBITDA on FY28 estimate.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data