NMDC Upgraded to BUY from ADD

| Leave a Comment | Stocks

ICICI Securities has upgraded NMDC to a “BUY” rating from “ADD”. The brokerage firm has raised its target price for the stock to INR 180 from INR 130.

The upgrade is based on four factors:

  1. Sales volume in FY24E is expected to breach the 32-40 million tonne range.
  2. The long-term volume visibility is clearer as the roadmap for 100 million tonne per annum (mtpa) by FY30 is being worked on.
  3. Commercial mining in Odisha is progressively getting undermined, resulting in more opportunity.
  4. Return on equity (RoE) may improve further from the current level of 22% as the mining business takes the centre stage and the steel plant is demerged.

ICICI Securities has taken into account the sales volume until August 2023 and the favourable price outlook to raise its FY24E/FY25E EBITDA by 22%/38%, respectively. The brokerage firm has also raised its EV/EBITDA multiple to 5.5x (earlier 5x) in view of the robust volume trajectory in the future.

Overall, ICICI Securities is positive on NMDC’s outlook and believes that the stock is undervalued at the current levels.


Related News

  • 22 Sep

    NBCC shares trade higher on Rs 100 crore work order from SAIL

    NBCC shares were trading 3 percent higher on September 22 after the company announced having bagged a work order worth Rs 100 crore from SAIL. This is the fourth order-win announced by the company in this month, the total value of the same being Rs 450 crore. NBCC is a public sector undertaking engaged in the business of construction and real estate development. The company specializes in providing project management, consultancy and engineering services for civil construction, infrastructure development, and real estate projects.

  • 22 Sep

    Glenmark Pharma stock falls on stake sale in Glenmark Life Sciences

    Glenmark Pharma stock fell after the company announced it would sell a 75% stake in its subsidiary Glenmark Life Sciences to Nirma. Analysts expect the stake sale to benefit Glenmark Pharma, as it will transition from a net debt position to a cash surplus position. This is expected to have a positive impact on the company's return ratios over the next two to three years.

  • 22 Sep

    Berger Paints Shares Hit 52-Week High After Turning Ex-Bonus

    Berger Paints shares surged 6% to hit a 52-week high after turning ex-bonus on the record date for the issue of bonus shares in the ratio 1:5. The company posted a net profit of Rs 326.3 crore in the April-June quarter of FY24, up 39% year-on-year, on revenue of Rs 2,739.7 crore, up 10% year-on-year. The company expects to get net cash positive by the end of this fiscal year and expects to end the year with double-digit revenue growth on strong demand outlook.

  • 22 Sep

    Market Update for September 22, 2023

    IdeaForge Tech up 3.4% on order RVNL up 3% on highway MoU JSW Steel up 0.4% on sale ICICI Lombard down 1.6% on CEO exit ICICI Bank down 1% on healthcare investment NHPC up 1.3% on extended additional charge Kalyani Forge up 3.2% on new MD IRB Infra up 2.5% on road project closure

  • 22 Sep

    Lux Industries Shares Down 3% After Income Tax Raid

    Lux Industries shares fell 3% on September 22 after news emerged that the Income Tax department had conducted searches at the company's premises in Kolkata and alleged a tax evasion of Rs 200 crore. The company has confirmed the searches and is extending full support.

Leave a Reply

Your email address will not be published. Required fields are marked *