Navratna PSU company, NMDC Ltd is going to be in focus for the next two days as the stock price will turn ex-dividend. The PSU giant which is engaged in the minerals sector, is going to reward its investors with the first interim dividend after its 2:1 bonus issue. Before the record date, brokerage LKP Securities recommended BUY on NMDC due to its well-positioned business in the steel sector.
NMDC Share Price:
After market hours on March 18, NMDC stock closed at Rs 66.85 apiece, up by 2.91% on BSE, with a market cap of Rs 58,773.30 crore. The stock's 52-week high and low is at Rs 95.35 apiece and Rs 59.70 apiece respectively. Its price-to-equity ratio is around 8.83x, while its return on equity is at 23.61%, which is healthy.
NMDC Interim Dividend:
The company announced its first interim dividend of Rs 2.30 per share, having a face value of Rs 1 each for FY25.
The company said, this Interim Dividend shall be paid/dispatched within the prescribed timelines as per the provisions of the Companies Act, 2013 to those equity shareholders of the Company whose names appear in the Register of Members/records of Depositories as beneficial owners of the equity shares as on Friday, the 21st March 2025, which is the Record Date fixed for the purpose.
This will be NMDC's first dividend after its 2:1 bonus issue. Last year on December 27, NMDC turned ex-bonus for its bonus issue of 2:1, meaning, 2 (two) Bonus Equity Shares of face value ₹1/- each fully paid up were delivered for every 1 existing equity share of face value of ₹1/- each fully paid up.
BUY NMDC Stock?
Brokerage LKP Securities highlighted that with iron-ore production of around 45.1 mn tonnes (MT) in FY24, at an average of 64% Fe, NMDC sells one of the best grade Iron ore globally.
LKP's note highlighted that as per the National Steel Policy 2017, India targets 255 MT of crude steel production by FY30E, translating to an iron ore demand of ~380-410 MTPA.The government's infrastructure push further strengthens NMDC's long-term growth prospects. In CY23, global iron ore production hit 2.5 bn tonnes, with Australia and Brazil contributing ~56%. India, the fourth-largest producer, mined 251 MT. As the second-largest crude steel producer (143.6 MT in FY24), India's per capita steel consumption remains low at 93 kg (vs. 219 kg global average) but is rising. Key Indian iron ore miners include NMDC, OMC and Rungta, while Tata Steel and SAIL remain fully integrated captive mines.
Also, LKP added that NMDC is executing key capex projects to enhance dispatch, sales and mining capacities, targeting a production ramp-up from 51.8 MT to 67 MT by FY26 with EC approvals. As one of India's largest and lowest-cost iron ore producers, NMDC is well-positioned to capitalize on rising demand. Production guidance stands at 48 MT (+6% YoY) for FY25E (9MFY25: 30.8 MT) and 52 MT for FY26E, with a long-term goal of 100 MTPA by FY31E.
Additionally, with cash reserves at ₹77 bn (Jan-25), NMDC offers a stable dividend yield of 5-6% over FY25-27E.
On the valuation, LKP's note said, "NMDC's prices remain near long-term average discount levels to global import parity and are expected to stay stable. EBITDA per tonne/realization per tonne rose 20.5%/13.6% YoY to ₹5,199/₹ 1,947 in 9MFY25, driven by a 13.5% increase in blended domestic prices. While management targets 48 MT in FY25 and 53-54 MT in FY26, we remain conservative, estimating 47 MT in FY25, 52 MT in FY26, and 55 MT in FY27. Growth will be supported by volume expansion, higher pellet sales, and value-accretive projects like the slurry pipeline, while diversification into coal, gold, magnetite, and lithium aims to contribute 10-15% of revenue. We maintain our 'BUY' rating with a TP of ₹88, based on 6x EV/EBITDA FY27E."
About NMDC:
National Mineral Development Corporation (NMDC), a Navratna Public Sector Enterprise under the Ministry of Steel, Government of India is the single largest producer of iron ore in India. It owns and operates highly mechanized iron ore mines in Chhattisgarh and Karnataka and has its registered office in Hyderabad, Telangana. NMDC is considered to be one of the low-cost producers of iron ore in the world. It also operates the only mechanized diamond mine in India at Panna, Madhya Pradesh.
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