MOSL: NMDC (Under Review)-Miss led by higher operating cost-one-offs continue
​NMDC: Miss led by higher operating cost; one-offs continue
(NMDC IN, Mkt Cap USD5.5b, CMP INR118, Under Review)
- NMDC's 4QFY17 results came in weaker than expected due to higher operating cost, while one-off charges continued in 4Q. EBITDA was flat QoQ at INR14.3b (est. of INR15.1b), despite an 18% QoQ increase in realization. EBITDA is adjusted for the items we classify as one-offs (Exhibit 1). PAT, adjusted for one-offs and exceptional charge, was flat QoQ at INR9.2b (est. of INR10.8b). Reported PAT fell 14% QoQ to INR5.1b. For FY17, EBITDA increased 39% to INR44.9b, but adj. PAT declined 3% to INR31.5b due to lower other income.
- Sales were up 15% YoY (-3% QoQ) to 9.8mt, led by strong domestic crude steel production growth and demand for pellet exports.
- Realizations grew 18% QoQ to INR2,841/t. EBITDA/t rose 3% QoQ to INR1,463.
- EBITDA miss was driven by higher employee cost, royalty (which would normalize in subsequent quarters) and higher selling expenses.
NMDC Limited is an India-based company engaged in mining of iron ore. The Company's segments include Iron Ore, and Other minerals & services. It is also engaged in the production and sale of diamond, sponge iron and wind power. Its projects under construction include Bailadila Deposit-11/B, Kumaraswamy Iron Ore Project, 1.2 million tons per annum (MTPA) Pellet Plant at Donimalai, 3.0 million tons per annum (MTPA) Integrated Steel Plant in Chhattisgarh, Panthal Magnesite Project, Screening Plant III at Kirandul Complex, Screening Plant II at Donimalai Complex, doubling of Railway Line between Kirandul and Jagdalpur, Steel Plant at Bellary and Rail Link between Dalli-Rajhara-Rowghat-Jagdalpur Railway Line Project. It proposes to diversify into other commodities, such as steel making raw materials (coking coal, manganese ore nickel); fertilizer raw materials (rock phosphate potash), and thermal coal. It also proposes to invest in raw materials, such as tungsten and rare earth minerals.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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