NMDC Q2 Results: Margins expand from last year but miss expectations, topline beats

Shares of NMDC Ltd., the state-run miner surged to the day's high on Wednesday, October 29, in response to its September quarter results, which were better compared to the same quarter last year across parameters.

Net profit for the period increased by 41% from the same quarter last year to ₹1,683 crore, which was higher than the CNBC-TV18 poll of ₹1,621 crore.

Revenue increased by 30% on a year-on-year basis to ₹6,378.1 crore, which is also higher than the CNBC-TV18 poll of ₹5,825 crore.

NMDC's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter rose by 44% from last year to ₹1,993 crore, which is in-line with the CNBC-TV18 poll of ₹1,997 crore.

EBITDA margin for the period expanded by 300 basis points to 31.2% from 28.2% last year. However, the CNBC-TV18 poll had expected margins to expand further, towards the 34% mark. Lower cost of production, higher realisations and operating leverage contributed to the expansion in NMDC's margins.

In its provisional update shared earlier this month, NMDC had reported a 23.3% growth in Iron Ore production to 10.2 MT, while dispatches had increased by 10.2% from last year to 10.7 MT.

NMDC had recently announced a cut in the prices of lumps by ₹550 per tonne and for fines by ₹500 per tonne. Clarity behind such a price cut would be awaited from the management, along with the volume and capex outlook for the rest of the year.

Shares of NMDC are trading 3.5% higher after the earnings announcement at ₹77.23. The stock has risen 17% so far on a year-to-date basis.