NATIONAL MINERAL DEVELOPMENT CORPORATION
NMDC is a Navratna Public Sector Enterprise under the Ministry of Steel, Government of India and the single largest producer of iron ore in India. It owns and operates highly mechanized iron ore mines in Chhattisgarh and Karnataka and has its registered office at Hyderabad, Telangana. NMDC is considered to be one of the low-cost producers of iron ore in the world. It also operates the only mechanized diamond mine in India at Panna, Madhya Pradesh.
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The Company is producing about over 40 MTPA of iron ore from its major iron producing units i.e. from Bailadila Sector in Chhattisgarh and Donimalai in Bellary-Hospet region in Karnataka. NMDC envisages to have an iron ore production capacity of 100 MNT by FY30. It is under the administrative control of the Ministry of Steel. It has seven operational iron ore mining leases, five in Chhattisgarh and two in Karnataka.
Major Domains of Operations
As the largest iron ore producer in India, NMDC has an average annual production capacity of 51.8 million tonne (MT). Annual production was 40.8 MT in fiscal 2023, against 42.2 MT in fiscal 2022, whereas annual sales volumes were 38.3 MT and 40.6 MT, respectively. In fiscal 2023, the company accounted for around 16% of total iron ore production in India.
NMDC has seven iron ore mining leases (five in Chhattisgarh and two in Karnataka) with total reserve of 1,697 MT, providing high revenue visibility with mining life of over three decades. It has environment clearances for all the mines, and long-term validity of licences (till 2035-2038) for six of the seven mines. The licence for the Kumaraswamy mine in Karnataka was renewed in fiscal 2023 and is valid till October 2042. NMDC plans to increase its production and evacuation capacity to around 67 MT by fiscal 2026.
Iron ore is the key raw material for production of steel. NMDC sells around 70% of its iron ore to three counter parties: Rashtriya Ispat Nigam Ltd, JSW Steel Ltd and Arcelor Mittal Nippon Steel India Ltd.
Key Financial Highlights- H1 FY24
– Revenue from operations for H1FY24 stood a t ₹ 9,409 crore against 8,096 crore last year, up 16% (YoY).
– PBT for H1FY24 at ₹ 3,608 crore against 3,134 crore last year, up 15 % (YoY).
– PAT for H1FY24 stood at ₹ 2,678 crore against 2,362 crore last year, higher by 13 % (YoY).
– EPS for H1FY24 is ₹ 9.14 per share against 8.25 last year of a face value of ₹ 1 each.
Major Risk Factors
– Significant decline in production or operating margin, leading to material deterioration in cash accrual.
– Significant decline in demand from the 3 major steel companies to whom iron ore is supplied.
– Any major debt-funded capex weakening the capital structure.
– Reduction in GoI holding to less than 51% resulting in diluted importance to the central government.
Sector: Metals & Mining
Market Price: Rs. 196.50 as on today
FV: Rs 1/-
Stock Name: NMDC Ltd
BSE Code: 526371, NSE Code: NMDC
Market Cap.: Rs 56,223 Cr
Book Value: Rs. 77.19
Segment: Industrial Minerals
Incorporation: 1958
Headquarters: Hyderabad
