NMDC Ltd (Q3 FY14)
India Infoline News Service | Mumbai |
NMDC has bounced back in the last one quarter on expectations that the economy has bottomed out and steel demand in the country would rebound over the next one year.
CMP Rs144, Target Rs154, Upside 6.9%
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NMDC’s topline of Rs28.2bn was marginally lower than our estimate on account of lower export sales
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Lower share of exports of total sales volume offset the impact of price hikes announced by the company in Q3 FY14. Realisations were marginally lower on a qoq basis against our estimate of 4% increase
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Sales volume jumped 41.3% yoy to 7.5mn tons; Production too remained strong at 39.6% yoy to 7.4mn tons
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NMDC exported 0.4mn tons of iron ore against 0.4mn tons in Q3 FY13 and 0.7mn tons in Q2 FY14
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Operating profit of Rs19bn was inline with our estimate as the impact of lower than expected realisation was offset by lower selling expenses
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NMDC has increased prices of fines in February by Rs100/ton
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Maintain Market Performer with a revised price target at Rs154.
| (Rs mn) |
Q3 FY14 |
Q3 FY13 |
% yoy |
Q2 FY14 |
% qoq |
| Net sales |
28,232 |
20,477 |
37.9 |
24,799 |
13.8 |
| Material costs |
(862) |
(231) |
274.0 |
(1,183) |
(27.1) |
| Personnel costs |
(1,574) |
(1,392) |
13.0 |
(1,447) |
8.8 |
| Selling expenses |
(2,432) |
(1,764) |
37.9 |
(3,664) |
(33.6) |
| Other overheads |
(4,336) |
(3,178) |
36.4 |
(3,569) |
21.5 |
| Operating profit |
19,028 |
13,913 |
36.8 |
14,936 |
27.4 |
| OPM (%) |
67.4 |
67.9 |
(54) bps |
60.2 |
717 bps |
| Depreciation |
(362) |
(339) |
6.8 |
(348) |
4.0 |
| Other income |
5,077 |
5,563 |
(8.7) |
5,384 |
(5.7) |
| PBT |
23,743 |
19,137 |
24.1 |
19,972 |
18.9 |
| Tax |
(8,070) |
(6,209) |
30.0 |
(6,788) |
18.9 |
| Effective tax rate (%) |
34.0 |
32.4 |
|
34.0 |
|
| Adjusted PAT |
15,673 |
12,928 |
21.2 |
13,184 |
18.9 |
| Adj. PAT margin (%) |
55.5 |
63.1 |
(762) bps |
53.2 |
235 bps |
| Reported PAT |
15,673 |
12,928 |
21.2 |
13,184 |
18.9 |
| Ann. EPS (Rs) |
15.8 |
13.0 |
21.2 |
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