NMDC (NMDC IN) – Q4FY26 Result Update – Stepping up capex; higher pricing to aid in H1 – Accumulate
Published on 02 Jun 2026
Mgmt. expects iron ore prices to remain largely range-bound in near term, while maintaining EBITDA margins at 42-43% aided by further reduction in cost of production. Key catalysts to watch out are: 1) ramp-up in production from new mines, 2) commissioning of slurry pipelines and logistics infra which would help save costs and ramp up volumes, 3) completion of doubling of KK rail line by Dec’26, and 4) ability to undertake price hikes amid rising domestic and imported ore availability. We change our EBITDA estimates for FY27/28E by +6.5%/-1.5% on higher near-term pricing and assuming coal mines’ volumes. We model in 55.8/62.9mt volumes for FY27/28E and expect NMDC to deliver Revenue/EBITDA/PAT CAGR of 16%/22%/19% respectively. At CMP, the stock is trading at 5.4x/5.2x EV of FY27/28E EBITDA. We maintain ‘Accumulate’ with a revised TP of INR 97 (earlier INR 95) assigning a higher multiple of 5.5x (earlier 5x) EV of Mar’28E EBITDA due to higher iron ore pricing, focus on higher volumes and diversification into newer businesses with healthy profit margins such as pellets and coal mining.
