Mining major NMDC’s share price surged 12.66% on Friday morning to trade at Rs 108 per share, a day after the company reported its April-June quarter earnings. NMDC, a Government of India owned mineral producer also informed the investors that its board has given its approval to the demerger of the NMDC Iron & Steel Plant.
NMDC’s consolidated net profit fell over 50% from the previous year to Rs 531 crore as revenues took a hit. The company said that the pandemic took a toll on its operations during the quarter, resulting in a loss of around 18.23 LT of production and 23.94 LT of Sales of Iron Ore.
Total income of NMDC was reported to be Rs 2,009 crore, down from Rs 3,386 crore in the same period last year. Expenses were down marginally to Rs 1,250 crore. Profit before tax for the company was recorded at Rs 758 crore, down 60% from the year ago period. On a consolidated basis, the net profit of NMDC stood at Rs 531 crore, down from Rs 1,717 crore in the year-ago period. Revenue from the iron ore segment stood at Rs 1,922 crore, while the sale of other minerals helped NMDC earn Rs 14 crore.
In the coming quarters, an increase in steel prices is also likely to help NMDC. “With approaching commissioning of the steel plant and the in-principle approval of demerger, as well as series of price hikes underway, NMDC makes a compelling investment case,” ICICI Securities added. With a ‘Buy’ call the brokerage firm has pinned a target price of Rs 130 on the stock.
