InvestorQ : How do you see the impact of the quarterly numbers on NMDC?
vidhya Laxmi made post

How do you see the impact of the quarterly numbers on NMDC?

sarah Leo answered.
9 months ago

India's largest iron ore miner, National Minerals Development Corporation or NMDC, has rallied by 10% on Friday despite not so flattering financial results for the Jun-20 quarter. It reported PAT at Rs.533 crore a fall of 55% on a YOY basis, due to the pandemic slowdown.

NMDC witnessed a sharp fall in sales turnover during the Jun-20 quarter at Rs.1938 crore from a level of Rs.3264 crore in the Jun-19 quarter. However, GMR has shown greenshoots of recovery from the July quarter onwards.

NMDC had hiked rates of iron ore by Rs 300 to Rs 2950 per tonne in early August 2020. Iron ore is the key raw material for steel manufacture and has a direct bearing on the price of steel. However, it protected EBITDA fall to just 29% on the back of cost controls.

NMDC will also look to demerge the steel unit from the mining business. This is expected to unlock value for minority investors because NMDC carries Rs.16,000 crore of WIP in its books but that hardly has any impact on the overall valuation of NMDC.