Navratna PSU company NMDC Ltd. turned ex-dividend on stock exchanges for a dividend payout of Rs 1 per share. This will be the final dividend of FY25. NMDC has given some major rewards in FY25 including 2:1 bonus issue and Rs 3.3 total dividends. Brokerage PL Capital has suggested to ACCUMULATE this mineral stock after its strong start to FY26 financial year.
NMDC Share Price:
After market hours, NMDC stock plunged by 4.4% on BSE to end at Rs 69.44 apiece. Its market cap stood at Rs 61,050.38 crore as of August 14. The stock's 52-week high and low is at Rs 82.72 apiece and Rs 59.56 apiece respectively.
NMDC Dividend:
On August 14, the company turned ex-dividend for its final dividend of Rs 1 per share for FY25. Earlier, the company paid about Rs 2.30 interim dividend and its ex-date was on March 21, 2025.
In total, the company is delivering about Rs 3.30 per share dividend for the financial year 2024-25.
NMDC Bonus Issue:
Apart from dividends, NMDC also rewarded investors with bonus issue in the ratio of 2:1. The record date was in December 2024, and the company delivered 2 free shares on existing 1 share.
Notably, this was the second bonus issue by NMDC, however, the first in 16 years. The last time NMDC sanctioned bonus shares to investors was in May 2008, also in the ratio of 2:1.
NMDC Share Price Recommendation:
"NMDC reported a strong Q1FY26 operating performance, driven by robust volume growth and better-than-expected pricing. Volumes grew 14% YoY supported by strong domestic steel demand supported by increased GoI spending and a lower base (volumes impacted by strike). Realizations rose 7.4% QoQ, led by price hikes undertaken for lump and fines from May'25," said Tushar Chaudhari, Research Analyst at PL Capital.
The analyst added, "Moderate increase in employee cost and lower ramp up of KIOCL pellet plant aided NMDC to deliver an EBITDA/t of Rs2,152. Receivables from RINL/NSL continue to remain elevated, keeping the cash conversion cycle under pressure. The Karnataka Mineral Rights and Bearing Land Tax Bill remains a major uncertainty for NMDC, which is still pending at President of India."
Furthermore, the analyst highlighted that NMDC's management aims to utilize maximum EC limits and produce ~55mt in FY26, though execution will be key given the monsoon in Karnataka and rising imports by domestic steel players. Anticipating sustained demand, NMDC raised iron ore prices from Aug'25, which should support EBITDA/t in Q2FY26. Legacy operations are expected to remain profitable in FY26, and the pellet plant, targeted for completion by FY26-end, should aid performance going forward.
Accordingly, on the valuation, the analyst said, "We maintain 50/55mt volumes for FY26/27E and expect NMDC to deliver Revenue/EBITDA/PAT CAGR of 20%/20%/17% respectively. At CMP, the stock is trading at 5.4x/4.4x EV of FY26/27E EBITDA. Maintain 'Accumulate' with a revised TP of Rs80 (earlier Rs73) valuing it at multiple of 5x EV of Mar'27E EBITDA."
About NMDC Ltd:
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 at 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.
The Company is producing about over 45 MTPA of iron ore from its major iron producing units i.e. from Bailadila Sector in Chhattisgarh and Donimalai in Bellary-Hospet region in Karnataka. NMDC envisages to have an iron ore production capacity of 100 MNT by FY30.
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.
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