NMDC (526371) Q1 24/25 earnings summary

Executive summary

• PBT and PAT increased by 19%-20% year-over-year despite a 14% drop in production volumes, attributed to strong financial management and operational efficiency.

• Revenue from operations for Q1 FY25 was nearly flat year-over-year at around ₹5,378 crore, while EBITDA rose 20% to ₹2,725 crore and PAT increased to ₹1,984 crore.

• NSL reduced losses by half and is on track to achieve monthly and quarterly break-even by Q2 and Q3, with annual break-even targeted for the current fiscal year.

• Supreme Court judgment on retrospective tax is being assessed; most liabilities are expected to be recoverable from customers due to consistent customer base and clear pricing terms.

• Unaudited standalone and consolidated financial results for the quarter ended June 30, 2024, were approved by the Board on August 12, 2024.

Financial highlights

• Production for Q1 FY25 was down by about 1.5 million tons or 14% year-over-year, with sales also declining.

• Revenue from operations for Q1 FY25 was ₹5,378 crore, almost unchanged from Q1 FY24.

• EBITDA margin improved to 51% from 42% year-over-year, and PAT rose 20% to ₹1,984 crore.

• Average sales realization per ton was ₹5,304, up 9% year-over-year.

• Royalty as a percentage of gross revenue decreased to 37% from 47% in the previous quarter.

Outlook and guidance

• Volume guidance for FY25 remains at 50 million tons, with confidence in making up the current 1 million ton shortfall by October.

• NSL aims to reach 1.5 million tons of hot metal production and break even by the end of the fiscal year.

• CapEx for FY25 is targeted at INR 2,200 crore, with expectations to exceed INR 3,200 crore by year-end.

• Capacity utilization is expected to reach 54 million tons in FY26, with incremental EC extensions anticipated.

• Management expects scaling up of operations and positive cash flow from NSL from FY 2024-25, supporting recovery of dues.