Buy NMDC, target price Rs 220: Motilal Oswal

Motilal Oswal has buy call on NMDC Ltd. with a target price of Rs 220. The current market price of NMDC Ltd. is Rs 172.7. Time period given by analyst is one year when NMDC price can reach defined target.

NMDC Ltd., incorporated in the year 1958, is a Large Cap company (having a market cap of Rs 50743.44 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 values the stock at INR220/share on a SoTP basis, valuing the iron ore business at 5x FY23E EV/EBITDA and the steel plant ~25% of its book value. At the CMP, the stock is trading at 3.7x its core Iron Ore Mining business and provides an attractive dividend yield of ~13%.

Promoter/FII Holdings
Promoters held 68.3 per cent stake in the company as of June 30, 2021, while FIIs held 5 per cent, DIIs 20 per cent and public and others 6.8 per cent.