NMDC shares decline 4% after Q1 results. Should you buy, sell or hold the stock?
NMDC shares fell 4% despite a 2% YoY rise in Q1FY27 profit to Rs 2,007 crore, while revenue increased 2% to Rs 6,795 crore. Iron ore production jumped 26% to 151.17 lakh tonnes, but sales rose just 2% to 117.30 lakh tonnes. Ore transferred for pellet job work increased 46% to 8.19 lakh tonnes during the quarter.
In the first quarter of fiscal year 2027, state-owned NMDC reported a 2% increase in profit after tax, reaching Rs 2,007 crore, up from Rs 1,969 crore in the previous year's quarter. Revenue from operations grew 2% to Rs 6,795 crore from Rs 6,634 crore. Iron ore production saw a significant rise of 26% YoY, reaching 151.17 lakh tonnes, while iron ore sales increased by a modest 2% to 117.30 lakh tonnes. The company also experienced a 46% surge in ore transferred for pellet job work to 8.19 lakh tonnes.
Despite these positive indicators, NMDC's shares experienced a 4% decline to Rs 81.20 on the BSE. The company's EBITDA and margin stood at Rs 2,817 crore and 41%, respectively, slightly down from the previous year. NMDC's average domestic realization increased by 4% to Rs 5,548 per tonne, while iron ore sales revenue rose 6% to Rs 6,508 crore.
Industry analysts have offered varying opinions on NMDC's shares. Motilal Oswal maintains a Buy rating with a target price of Rs 98, noting that healthy average selling prices offset muted quarter-on-quarter volumes. The brokerage expects production volumes to rise to around 60 million tonnes in FY27, driven by increased environmental clearance limits and a new mine in a joint venture.
On the other hand, JM Financial has a more cautious stance, maintaining a Reduce rating with a target price of Rs 87, indicating a potential upside of around 3%. The firm emphasizes that volume growth and capital expenditure execution will be crucial factors to monitor for NMDC's future performance.
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