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National Mineral Development Corporation Ltd (NMDC) released its second-quarter earnings report on 11 November 2021. The company reported its best Q2 performance on a Y-o-Y basis ever since its inception, with a 209% YoY increase in the consolidated PAT. The company’s net profit for the quarter under review grew to Rs 2,326 crore from Rs 752 crore in the year-ago period. However, on a sequential basis, the minerals PSU’s net profit plummeted nearly 37% to Rs 2,326 crore from Rs 3,186 crore it had reported in Q1 FY22.

The company’s total income for the period saw a rise of a whopping 196% YoY to Rs 6,882 crore in Q2 FY22 from Rs 2,318 crore in Q2 FY21. However, the total income on a sequential basis remains largely stagnant with an increase of a mere Rs 226 crore. The company’s expenses also saw a two-fold increase on a YoY basis at Rs 3,742 crore from Rs 1,256 crore.

The company’s stellar performance has been attributed to a three-fold increase in iron ore sales that grew to Rs 6,687 crore in this quarter from Rs 2,191 crore in the corresponding quarter last year. NMDC’s EBITDA increased to Rs 3,203 crore from Rs 1,118 crore in the year-ago period while the EBITDA margin declined from 50% to 47% in the same period.

NMDC’s stock closed in the green at Rs 144.75 per share after gaining 0.35% during the intraday trading session on 11 November 2021.

NMDC Ltd Quarterly Results Q2 FY22 – Hits

  •  PAT up 209% YoY to Rs 2,326 crore from Rs 752 crore in Q2 FY22.
  • Total income up 196% YoY to Rs 6,882 crore in Q2 FY22 from Rs 2,318 crore.
  •  Profit before tax up by 196% YoY at Rs 3,142 crore from Rs 1,063 crore.
  • Revenue from operations up by 205% YoY to Rs 6,794 crore from Rs 2,230 crore.
  • Income from interest up from Rs 40 crore to Rs 50 crore on a YoY basis.
  •  EBITDA increased to Rs 3,203 crore from Rs 1,118 crore in the year-ago period.
  •  Iron ore production rose by 56% YoY to 87.7 LT from 56.3 LT.
  • Earnings per share increased to Rs 7.94 from Rs 2.46 on a YoY basis.

NMD Q2 Results – Misses

  • PAT fell by 37% to Rs 2,326 crore from Rs 3,186 crore in the year-ago period.
  •  Total income decreased by Rs 226 crore on a sequential basis.
  • Royalty and other levies saw a 259% YoY increase to Rs 1,363 crore from Rs 983 crore.
  • EBITDA margin down by 3% YoY to 47% from 50%.
  • EPS on a sequential basis down from 10.87 to Rs 7.94.

Segment-wise revenue

Iron ore: Revenue up at Rs 6,687 crore from Rs 2,191 crore on a YoY basis.

Pellets, other minerals & services: Revenue up at Rs 105.5 crore from Rs 37.9 crore on a YoY basis.

Other things to know

  • The Government of India amended the Mines and Mineral (Development & Regulation) 2021 Act or the MMDR Act to improve the auction process of coal and mining rights. As per the amendment, NMDC is now obligated to pay an additional 150% royalty to the Government. This amounts to royalties worth Rs 2,760 crore in the current quarter against Rs 380 crore in the year-ago period- making it a colossal 626% increase!
  • The company’s Price-to-earnings ratio is currently at 6.74 against the industry average of 24.71 while its Price-to-book ratio is currently at 1.41 against the sector average of 3.17. NMDC’s dividend yield stands at 5.38% against the industry average of 1.51%.
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