Shares of NMDC rose over 3% today after financial services firm Motilal Oswal reiterated its buy call for the state-owned miner. NMDC shares gained 3.67% to Rs 115.60 against the previous close of Rs 111.50 on BSE. NMDC stock has gained after 4 days of consecutive fall.
Shares of NMDC are trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
The stock has lost 13.5 per cent in a year and fallen 14.02 per cent in 2022. Total 2.77 lakh shares changed hands amounting to a turnover of Rs 3.16 crore on BSE. Market cap of the firm rose to Rs 33,658 crore.
The stock hit a 52-week high of Rs 143.15 on April 11, 2022 and a 52-week low of Rs 81.27 on July 15, 2022. Motilal Oswal raised its target price to Rs 138 from Rs 134 earlier as the brokerage is factoring a lower iron ore price regime.
NMDC shares are trading at 4 times FY24 EV/Ebitda. With no more capex-intensive programs, the company is likely to generate a strong cash flow, said Motilal.
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“With China re-opening and rushing to finish real estate projects, we expect demand for iron ore to remain strong in the near term. In addition, we expect with winter in China, focus shall again be on importing more pellets from India, which should drive demand for iron ore in India. The government waiving off pellet export duty is an added advantage,” Motilal Oswal said.
Motilal Oswal expects NMDC to continue with volume CAGR of 11.5 per cent from FY21-25 on the back of higher volumes in both Chhattisgarh and Karnataka. It expects NMDC to clock a record 51 mt in FY25. It is building a dividend per share of Rs 12 for FY24 and Rs 10 for FY25, implying a payout of 59-61 per cent and an attractive dividend yield of 9.5 per cent/7.9 per cent for FY24/25, respectively.
NMDC reported a 62 per cent fall in its consolidated net profit to Rs 885.65 crore during the quarter ended September, mainly on account of lower income. It had reported Rs 2,339.58 crore net profit during the July-September period of the preceding fiscal. Total income fell to Rs 3,754.77 crore in the second quarter of the current financial year from Rs 6,882.44 crore in the year-ago period.
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