NMDC Q4 Review - Lower Than Expected Royalty Incidence Drives Beat: ICICI Securities

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ICICI Securities Report

NMDC Ltd. reported better than expected Q4 FY21 Ebitda at Rs 42.4 billion.

FY21 Ebitda to operating cash flow conversion (83%) has been highest since FY16.

The key element of Ebitda surprise has been lower than expected royalty incidence of Rs 1.5 billion for Q4 FY21 – implies Rs 160/tonne on volumes of 9.3 million tonne (excluding kumaraswamy mines).

Given additional incidence amounts to 22.5%, we seek more explanation on the same at the call scheduled today.

Ebitda/tonne at Rs 3,818 is set for another increase in Q1 FY22; looks peakish given increasing domestic supply, long product demand and price headwind.

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