ICICI Securities is bullish on NMDC has recommended buy rating on the stock with a target price of Rs 130 in its research report dated June 17, 2020.
ICICI Securities research report on NMDC
Covid-19 outbreak has impeded what could have been the best two quarters for domestic iron ore prices. Combination of a domestic supply shock post Odisha iron ore auctions and global price rally (fuelled by sharp demand increase in China and continued supply uncertainty from Brazil) could have materialised into higher iron ore prices for NMDC. However, the demand impact created by Covid19 crisis led to domestic fine prices witnessing a drop of 33% in the past three months, a period in which global prices moved up by 20%. NMDC would do well to focus on volumes and capture as much market share as possible, given there is a vacancy that Odisha iron ore will create for the incumbent. Q4FY20 EBITDA disappointed, mainly due to lower-than-expected realisations. We maintain BUY with a revised target price of Rs130/share. (Rs140 earlier).
Outlook
We maintain BUY with a revised target price of Rs130/share. (Rs140 earlier).
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