NMDC

NMDC, India's largest producer and exporter of iron ore, reported healthy 22% growth in net profit to Rs 1858.81 crore in Dec 2011 quarter, though a tad below market expectation. The bottomline growth was aided by robust operating performance, spike in other income and crash in effective tax rate. The topline grew by 8% to Rs 2821.95 crore. Aided by higher pricing from sale of iron ore through E-auction and being only iron ore miner in Karnataka post iron ore ban in Karnataka in August 2011, the operating profit margin (OPM) grew by impressive 320 bps. Thus the operating profit grew 12% to Rs 2260.71 crore.

Quarter Performance

The topline grew by 8% to Rs 2821.95 crore in Dec 2011 quarter. The OPM spiked by impressive 320 bps to 80.1% on account of sales of iron ore through e-auction which is priced higher than market prices and the company being the only miner in Karnataka post the iron ore ban issued on 26^th August 2011 in the locality. Thus the operating profit grew by 12% to Rs 2260.71 crore. Royalty cess, as % to sales net stock adjusted, fell by 60 bps to 9%. Also the stores & selling costs crashed by 390 bps to 4%. On the other hand, staff cost grew by 70 bps to 5% while other expenditure grew by 60 bps to 3% The raw material costs was unchanged at below 1%.

The PBT grew 21% to Rs 2751.64 crore on spike in other income and moderate depreciation costs. The other income grew by whopping 78% to Rs 525.39 crore while the depreciation cost grew by meager 17% to Rs 34.46 crore. Further 100 bps fall in effective tax rate lifted the net profit by 22% to Rs 1858.81 crore.

Nine Month Performance

In nine month ended Dec 2011, the topline grew by 14% to Rs 8666.88 crore. Growth in OPM by 250 bps to 80.2% lifted the operating profit by 18% to Rs 6950.71 crore. Surge in other income (by whopping 93%) and marginal depreciation cost growth enabled 26% growth in PBT to Rs 8320.23 crore. Further net profit improved by 28% to Rs 5623.11 crore on 80 bps fall in effective tax rate.

• The Board of Directors has approved payment of second interim dividend of Re1.00 per equity share for the financial year 2011-12. Cumulatively, the total interim dividend paid so far in FY 2012 is Rs 2 per equity share.
• Action has been initiated to sell the plant and machinery of Silica Sand Project, Lalapur and UPFO Plant, Vizag.
• The promoters and promoter group share holding remains unchanged at 90% in quarter ended Dec 2011. Promoters have pledged nil shares of the company

Currently the shares of NMDC are quoting at around Rs 185 at BSE.

NMDC: Company Results