NMDC shares worth a buy after Q4 miss? Kotak says 'Sell'; what Antique, MOFSL, others say

Shares of NMDC Ltd, the largest producer of iron ore in India, climbed on Thursday, taking its one-month return to 10 per cent. The Navratna PSU's Q4 results were below-par and analysts believe volume growth remains a key monitorable for the stock going ahead. Despite the Q4 earnings miss, analysts still see potential upside for the stock ahead. 

On Thursday, the stock was trading 1.44 per cent higher at Rs 71.87.  

Antique Stock Broking said it favours the company’s net cash position and capacity expansion plans to support higher volume offtake.

"We tweak our estimates as we factor in lower volume, higher employee costs, and marginally lower realisation leading to 2.9 per cent/ 6.7 per cent change in FY26/27 EBitda respectively. We maintain BUY rating with a revised target of Rs 86 (earlier Rs 94)," Antique Stock Broking said.

Elara Securities said while healthy demand and focus on ramp-up in utilisation should be key triggers for near-to-medium term volume growth, successful execution of NMDC’s target of reaching 100 million tonnes capacity will mark the next phase of growth trajectory. 

"Despite the likely rise in capex outflow, a healthy balance sheet with net cash position provides cushion to any future challenges. Thus, we reiterate Accumulate," it said while raising its target to Rs 82 from Rs 73 earlier. 

MOFSL said volume growth for NMDC picked up after sluggishness in the early part of the year. NMDC implemented regular price hikes in FY25, which offset the adverse volume impact, translating into a healthy operating profit.

MOFSL said a healthy volume pick-up and stable realisation will drive healthy operating growth and, thus, it largely retained its estimates for FY26-27. 

"At CMP, NMDC trades at 4.5 times EV/Ebitda on FY27E. We reiterate our BUY rating on NMDC with a target of Rs 83 (based on 5.5x FY27E EV/Ebitda)," MOFSL said. 

NMDC's standalone Ebitda was below the Street estimates due to higher costs. Kotak Institutional said it sees domestic iron ore prices at their peak and expect a correction, led by seasonal headwinds in the domestic steel market and a premium to import parity level relative to history. 

"Capex plans over the next five years, along with diversification into other minerals, appears return dilutive. Q4 receivables increased 120 per cent YoY on credit sales to PSUs, with the risk of under-recovery. Aggressive capex plans should impact FCF/dividends and deteriorate the balance sheet," Kotak said while maintaining 'Sell' on the stock with a fair value of Rs 55.