Add NMDC, target price Rs 195: ICICI Securities

ICICI Securities has add call on NMDC with a target price of Rs 195. The current market price of NMDC Ltd. is Rs 172.25. Time period given by analyst is one year when NMDC Ltd. price can reach defined target.

NMDC Ltd., incorporated in the year 1958, is a Large Cap company (having a market cap of Rs 50816.71 Crore) operating in Mining sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 6932.75 Crore, up 55.41 % from last quarter Total Income of Rs 4460.97 Crore and up 108.76 % from last year same quarter Total Income of Rs 3320.95 Crore. Company reported net profit after tax of Rs 2835.54 Crore in latest quarter.


Investment Rationale
The brokerage believes that the attributed value of the steel plant will be realised when i) commissioning happens or ii) government is able to find a suitable partner to offload stake in the steel plant. Demerger and listing was the desirable first step and has been approved by NMDC board. Elevated iron ore prices and profitability is also leading to higher interim earnings and dividend expectations and may have a positive ruboff on interim valuations. Q1FY22E expected EBITDA at Rs42.4bn, sets up the stage well for FY22E EBITDA of Rs134bn.

Promoter/FII Holdings
Promoters held 68.3 per cent stake in the company as of March 31, 2021, while FIIs held 4.7 per cent, DIIs 20.6 per cent and public and others 6.4 per cent.