India’s largest iron-ore manufacturer NMDC today announced its quarterly results and termed the Q1 FY22 results as one of its best Q1 performances since the inception of the enterprise. NMDC reported a whopping 500% y-o-y increase in the consolidated net profit at Rs 3,191.45 crore.
The state-owned mineral-producing company also reported a 423% EBITDA rise at Rs 4,322 crore. NMDC had last week announced that the prices of lump iron ore will be cut by Rs 300/tonne. Although iron ore rates in the international market remain volatile and jittery, NMDC reported a 236% increase in its revenue from operations at Rs 6,512.21 crore.
The company which comes under the ambit of the Steel Ministry of India saw a 34.9% increase in overall production at 89.10 LT in the June 2021 quarter compared to its previous best of 85.27 LT in Q1 FY18. NMDC also reported a meteoric 50.6% hike in sales, the highest in the enterprise’s history.
NMDC’s stock closed in the green at Rs 174.25 after rising by 1.43% at the end of the intra-day trading session ahead of its Q1 FY22 results.
- Net consolidated profit up by nearly 500% from Rs 531.78 crore to Rs 3,191.45 crore y-o-y.
- Revenue from operations increased by 236% to Rs 6,512.21 crore from Rs 1,937.50 crore over the year-ago period.
- Other income grew from Rs 71.7 crore in Q1 FY22 to Rs 144 crore in the June 2021 quarter.
- EBITDA spiked 423% to Rs 4,322 crore from Rs 826 crore y-o-y.
- NMDC’s y-o-y sales saw a growth of 51% while the production capacity grew by 35%.
- Liabilities down from Rs 7,032 crore to Rs 6,102 crore q-o-q.
- Quarterly tax expense down from Rs 1,430 crores in the March quarter to Rs 1,070 crore in the Q1 FY22.
- Earnings per share (EPS) up from Rs 1.73 to Rs 10.89 y-o-y.
- The company reported a dip of Rs 335 crore in q-o-q revenue from operations.
- Total expenses hiked from Rs 1,250 crore to Rs 2,394 crore q-o-q.
Iron ore sales plummeted q-o-q by 5% from Rs 6,807.44 crore to Rs 6.447.18 crore.
q-o-q iron ore production by 28% from 123 LT to 89.10 LT on account of lockdowns triggered by the second wave.
Other minerals & services
Income from the pellet, other minerals, and services up from Rs 40.13 crore to Rs 65.03 crore q-o-q.
NMDC Ltd. Demerger
Govt-owned NMDC Ltd. last month initiated the process of separating its steel unit in a demerger. NMDC Steel Ltd has been a subsidiary of NMDC Ltd and currently does not have any business operations. Although the demerger has been given a green signal by NMDC Ltd board of directors, the move still awaits the nod of investors, SEBI, and the Union ministry of corporate affairs.
What does this mean for the investor?
NMDC has reported a consistent rise in net profit and revenue amid a wobbly iron ore international market. There were reports of NMDC Steel Ltd demerger. A nod for a demerger could point towards divestment of the steel plant. With the NMDC setting up a 3 MTPA integrated steel plant in Chhattisgarh’s Nagamar, analysts expect the demerger to pave the way for value unlocking since the market has not ascribed a value to the steel plant yet.