Stock to Sell: Citi sees 11% downside in Navratna PSU; upside remains capped

NMDC Share Price Today: Shares of NMDC Ltd were trading higher on Wednesday even as the state-owned miner reported a decline in quarterly profit. At around 12:08 pm, NMDC shares were up Rs 2.61, or 3.20 per cent, at Rs 84.26 on the NSE.

India’s largest iron ore producer reported a nearly 8 per cent fall in consolidated net profit for the December quarter at Rs 1,747.01 crore, compared with Rs 1,896.66 crore in the year-ago period. The decline in profit came despite a strong topline performance during the quarter.

Revenue rises, costs weigh on margins

Add Zee Business as a Preferred Source

NMDC’s revenue from operations rose nearly 16 per cent year-on-year to Rs 7,610.79 crore, up from Rs 6,567.83 crore a year earlier. However, profitability was weighed down by a sharp rise in costs. Total expenditure increased to Rs 5,608.54 crore during the quarter, compared with Rs 4,359.07 crore in the corresponding period last year.

For the nine months ended December, NMDC reported an improvement in earnings, with net profit rising to Rs 5,397.12 crore from Rs 5,055.64 crore a year ago. Revenue from operations for the period stood at Rs 20,727.76 crore, higher than Rs 16,900.93 crore in the same period last fiscal.

Rs 2.50 interim dividend announced

Alongside the quarterly results, NMDC’s board declared a first interim dividend of Rs 2.50 per equity share of face value Rs 1 each for 2025–26, providing a boost to shareholder sentiment.

The board also approved a proposal to incorporate a wholly-owned subsidiary focused on the acquisition, exploration, production and related activities of critical minerals. The company said the move would be subject to approvals from the Ministry of Steel, DIPAM, and other regulatory authorities as required.

Production and sales remain firm

Operational performance remained steady. NMDC said iron ore production in January rose 9 per cent to 5.56 million tonnes, compared with 5.10 MT in the same month last year. Sales during the month increased to 4.79 MT from 4.48 MT.

For the 10 months ended January, iron ore production climbed to 42.45 MT, up from 35.87 MT a year earlier, while sales rose to 39.73 MT from 36.22 MT.

NMDC is targeting more than 50 million tonnes of iron ore production in the current financial year. The company has also recently commenced mining operations at the Tokisud North Coal Block in Jharkhand, adding a new commodity, new mine and a new geography to its portfolio.

Broker view remains cautious

Despite the positive operational outlook and dividend announcement, brokerage Citi maintained a ‘Sell’ rating on NMDC, raising its target price to Rs 72 from Rs 66. The brokerage flagged no major surprises in the December quarter, noting that pricing is likely to remain rangebound and valuation upside appears limited. Citi estimates NMDC’s FY26 dividend at around Rs 3.5 per share.

The mixed cues — steady operations and shareholder payouts on one hand, and margin pressures and cautious broker commentary on the other — kept NMDC shares volatile in Wednesday’s trade.