NMDC

NMDC reported a robust performance in FY26, with production exceeding 53 million tons and sales revenue reaching INR31,000 crores. This strong showing, coupled with an 11% growth in PAT, positions the company to fulfill the requirements for Maharatna status. Management expressed confidence that this performance lays the foundation for achieving a 100 million tons production target by the end of the decade, with an immediate target of 60 million tons for FY27.

The company is aggressively expanding its mining operations. Deposit 4 in Bailadila has been opened, with commercial mining expected to commence in July (Q2 FY27), targeting 1 million ton in FY27 and ramping up to 7 million tons in 1.5-2 years. Deposit 13 is expected to contribute over 0.5 million tons in FY27, with a long-term target of 20-21 million tons in 4-5 years. Additionally, NMDC is diversifying into coal, with the Tokisud mine expected to begin coal extraction by Q2 FY27, targeting 0.75-1 million tons in FY27, and the Rohne coal block planned for opening in late Q3 FY27, though no production is expected this fiscal year due to overburden removal.

NMDC is actively pursuing diversification into critical minerals and rare earths, primarily through international acquisitions. The company plans to spend INR2,000-3,000 crores on acquiring assets abroad in FY27. Domestically, an MOU has been signed with Gujarat Mineral Development Corporation to jointly develop a rare earth mine and processing facilities. A new subsidiary dedicated to rare earths and critical materials has also been established, signaling a serious commitment to this strategic area.

Significant progress is being made on logistics infrastructure. The railway doubling project, crucial for evacuation, is nearing completion, with the final section between Bhansi and Bacheli expected to be finished by December. This will immediately increase evacuation capacity to 40 million tons, up from the current 28-30 million tons. Furthermore, the pellet plant and 15 million ton slurry pipeline from Bacheli to Nagarnar are in pre-commissioning trials and are expected to be commissioned by end of June or mid-July, enhancing efficiency and value addition.

NMDC has outlined an ambitious capex plan, with an estimated spend of INR6,000 crores for FY27, a significant increase from INR3,300 crores in FY26. The company projects a total capex of INR40,000-50,000 crores over the next three years to achieve its 100 million tons capacity target. Management emphasized that these expansion and acquisition requirements would be funded entirely through internal resources, with no immediate plans to leverage the balance sheet, ensuring financial stability during this growth phase.

A key strategic initiative is the creation of a blending yard at Vizag, for which the board has sanctioned INR3,000 crores. This facility will enable NMDC to produce branded iron ore with consistent quality and precise specifications, a first for India. This move is expected to fetch a substantial premium in the market by increasing blast furnace efficiency for customers. The Vizag location also offers strategic advantages for accessing both local and coastal markets.

The temporary steel trading business with NMDC Steel, which impacted Q4 EBITDA, was a one-time^📎 measure to address NMDC Steel's cash flow issues and is not expected to recur in Q1 FY27. Regarding RINL receivables, while the total outstanding amount is being liquidated at approximately INR100 crores per month, the full recovery is anticipated to take 1.5 to 2 years. Management expressed confidence in full recovery due to RINL being a government-owned entity and its strategic importance as a customer.