NMDC production rises 18% YoY, increases iron ore prices; shares gain 4%

Shares of NMDC gained 3.6 percent in trade on January 2 as the state-owned firm increased prices of lump ore and  fines. Additionally, the iron ore producer reported that the production for 2023 had risen around 18 percent from 2022 levels.

The price of lump iron ore has been raised by Rs 200-250/tonne to Rs 5,600/tonne, while the price of fines has been increased by Rs 250 per tonne to Rs 4,910 per tonne.

In a filing on the exchanges, NMDC said, “The prices are inclusive of Royalty, DMF, NMET and exclusive of Cess, Forest Permit Fee, Transit Fee, GST, Environmental Cess, Infrastructure Cess and other taxes.”

As of 11:30 am, shares of NMDC were trading at Rs 217.1 per share on the NSE, higher by 2.7 percent compared to the closing price of the previous session.

The overall production in 2023 came to 31.79 MT, over the total production of 26.93 MT in 2022, marking an on-year rise of around 18 percent. On the sales front, the iron producer sold 31.97 MT of iron ore, higher by 23.9 percent from 25.8 MT in 2022.

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Motilal Oswal said that NMDC is on track to produce 46 MT of iron ore in FY24E. The production between the April to November period was up 17 percent YoY to 27.3 MT. Over FY25, NMDC is likely to surpass a production of 50 MT.

“The traction in production volumes would be driven by improved capacity and strong domestic demand. NMDC is undertaking multiple evacuation and capacity enhancement capex, which are likely to expand the production capacity to 67 MT by FY26-27E from the current 51.8 MT, and eventually to 100 MT by FY28-30E,” added the domestic brokerage.

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