NMDC shares drop 5% after 2-day gains; here are target prices

NMDC shares fell 5 per cent in Thursday's trade after rising in the past two sessions. A couple of brokerages are positive on the NMDC stock, even as they believe Karnataka Mineral Rights and Bearing Land Tax Bill remained a major uncertainty. The June quarter revenue was largely in line with estimates. Volumes though were muted sequentially, offset by healthy NSR. 

For the quarter, adjuted profit for the quarter at about Rs 1,970 crore was higher than MOFSL estimate of Rs 1,800 crore. The broking firm retained 'Buy' on the stock. The stock fell 4.93 per cent to hit a low of Rs 69.02 on BSE.

PL Capital said the NMDC management aims to utilise maximum EC limits and produce 55mt in FY26, though execution will be key given the monsoon in Karnataka and rising imports by domestic steel players. 

"Anticipating sustained demand, NMDC raised iron ore prices from August, which should support Ebitda/t in Q2FY26. Legacy operations are expected to remain profitable in FY26, and the pellet plant, targeted for completion by FY26-end, should aid performance going forward," it said while revising its target price on NMDC to Rs 80 from Rs 73 earlier. 

Nuvama said dues outstanding surged in Q1 led by a jump in dues from NMDC Steel, whereas at RINL dues fell for iron ore supplies. Nuvama said dues should decrease further on the back of GoI’s support to revive RINL and NMDC Steel’s returning to profits in Q1FY26. Though these dues are recoverable, NMDC has provisioned for credit loss expected on NMDC Steel and RINL receivables.

"We forecast Q2FY26 Ebita/tonne at Rs 1,800–2,000 led by higher prices (hiked by Rs 400 per tonne in August and volume growth of ~10%-plus YoY). Receivables from RINL have decreased QoQ while overall receivables shall fall in the coming quarters with NMDC Steel becoming profitable in Q1FY26. All in all, we maintain FY26E/27E Ebitda; at 9x FY27E EPS, the target comes to Rs 85 (unchanged); retain ‘BUY’," Nuvama said.