ICICI Direct recommended hold rating on NMDC with a target price of Rs 100 in its research report dated August 31, 2020.
ICICI Direct's research report on NMDC
NMDC reported an operationally healthy set of Q1FY21 numbers wherein topline, PAT came in line with our estimate while EBITDA came in higher than our estimate. Total operating income for the quarter was at Rs 1938 crore, broadly in line with our estimate of Rs 1988 crore. EBITDA margin for the quarter was at 39.0%, higher than our estimate of 35.4%. Hence, EBITDA for the quarter was at Rs 755 crore, higher than our estimate of Rs 704 crore. PAT came in at Rs 533 crore, broadly in line with our estimate of Rs 538 crore.
Outlook
Hence, the EBITDA margin profile of NMDC is expected to deteriorate notably. Going forward, we value the stock on an SoTP basis and arrive at a target price of Rs 100. We maintain our HOLD recommendation on the stock.
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