NMDC Shares Drop Following Weak Q2 EBITDA as Nuvama Predicts 42% Upside

NMDC shares fell 1.76 percent to close at 69.90 rupees on Friday, November 13, on the BSE, erasing earlier weekly gains.

Financial Results

The iron ore mining company reported a second-quarter EBITDA of 19.4 billion rupees, marking a 3 percent decline compared to the same period last year. This figure came in below market expectations. The quarterly performance was affected by higher royalty and premium costs alongside lower sales volume, which brought the EBITDA per tonne down by 17 rupees annually to 1,853 rupees.

Brokerage Outlook

Despite the drop in earnings, brokerage firm Nuvama kept a 'Buy' rating on the stock and raised its target price to 100 rupees per share for a 12-month period, up from its previous target of 97 rupees. Nuvama expects an uptick in sales volume during the second half of the financial year because supplies have normalized after monsoon-related transport problems.

Market Standing

NMDC holds a strong history of paying continuous dividends over the past twenty-five years, with an annual dividend yield of 3.6 percent in the 2025-26 financial year. However, the company's share price has faced pressure recently, dropping 2.17 percent over the past month, 17.74 percent over three months, and 23 percent over the last six months. On Friday, the company's market capitalization stood at 61,454.80 crore rupees.

Context

Public sector undertakings in the mining sector often see their sales volume fluctuate due to seasonal weather patterns like the monsoon, which disrupts transport networks. Brokerage firms typically adjust their financial models and target prices based on these short-term operational hurdles and expected recovery periods.