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NMDC Ltd (Q3 FY14)

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.

February 11, 2014 3:46 IST | India Infoline News Service
CMP Rs144, Target Rs154, Upside 6.9%

  • NMDC’s topline of Rs28.2bn was marginally lower than our estimate on account of lower export sales

  • 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

  • Sales volume jumped 41.3% yoy to 7.5mn tons; Production too remained strong at 39.6% yoy to 7.4mn tons

  • NMDC exported 0.4mn tons of iron ore against 0.4mn tons in Q3 FY13 and 0.7mn tons in Q2 FY14

  • Operating profit of Rs19bn was inline with our estimate as the impact of lower than expected realisation was offset by lower selling expenses

  • NMDC has increased prices of fines in February by Rs100/ton

  • Maintain Market Performer with a revised price target at Rs154.

Result table
(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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