NMDC’s shares have gained about 16% so far in 2026, and trade at an enterprise value of 6-6.5 times its FY27 estimated Ebitda. While the price trend looks favourable currently, the medium-term trajectory may not be very favourable.
Summary
NMDC’s shares have gained about 16% so far in 2026, and trade at an enterprise value of 6-6.5 times its FY27 estimated Ebitda. While the price trend looks favourable currently, the medium-term trajectory may not be very favourable.
NMDC Ltd’s shares have risen about 10% after an impressive March quarter (Q4FY26) performance. It also helps that near-term demand prospects are robust and global iron ore prices are firm. The state-owned iron ore miner has taken two price hikes this quarter, totalling ₹650 per tonne for iron ore fines, and a modest ₹150 per tonne for lumps.
Besides, NMDC is also expected to benefit from higher iron ore production, an increase in the share of higher-grade ore, and its entry into mining of other minerals.
FY27 production guidance stands at 60 million tonnes (mt), and is targeted to reach 100 mt by 2030. For the first two months of FY27, production has reached 10 mt, in line with the guidance. For FY26, production stood at 53 mt, up 21% year-on-year, and close to its guidance of 55 mt.
Brokerages have a mixed view of the impact of price and volumes on NMDC’s earnings. While Nuvama Institutional Equities has raised its FY27 and FY28 Ebitda estimates by 13% and 16%, ICICI Securities has revised it by -4% and 5%, respectively.
During Q4FY26, NMDC commissioned a mine in Bailadila, Chhattisgarh, a joint venture with Chhattisgarh Mineral Development Corp, and expects to produce about 1.5 mt of ore from this mine in FY27.
Besides, its pelletization plant, in joint venture with KIOCL Ltd and started in FY25, achieved production of 2.4 mt in FY26, reflecting a swift ramp-up. This is targeted to reach 3.3 mt in FY27.
NMDC is also trying to produce direct reduced iron (DRI) grade pellets, implying iron or Fe content of 67%, from this facility, which fetches price premium of $20-30 per tonne. The other pellet plant at Nagarnar, Chhattisgarh, along with the 15 million tonnes per annum (mtpa) slurry pipeline that would bring raw material from Bacheli to Nagarnar, is undergoing trials and is expected to be commissioned by mid-July.
NMDC also expects thermal coal production from its first mine at Tokisud, Jharkhand, to begin in Q2FY27. The coking coal mine at Rohne, Jharkhand, having peak capacity of 8 mtpa, is expected to begin production in FY28. The management expects coal to generate annual revenue of ₹5,000-8,000 crore within the next three years.
NMDC has also set up a subsidiary to enter the rare earth and other critical minerals markets and is scouting for assets abroad. “We should be spending ₹2,000-3,000 crores on acquisition of assets abroad this year,” the management said in the earnings call.
Capital expenditure (capex) is expected to grow to ₹6,000 crore in FY27 from ₹3,300 crore in FY26. NMDC plans to spend a total of ₹40,000-50,000 crore to increase its volume to 100 mtpa by 2030, and diversify into coal and critical minerals.
Revenue rose by 61% year-on-year to ₹11,200 crore in Q4FY26, driven by one-off trading of steel products for NMDC Steel. Revenue from the sale of iron ore rose by 17%, led by volume growth of 21% to 15.3 mt, the highest ever quarterly volume. However, realization declined marginally to ₹4,873 per tonne. Ebitda rose by 29% to ₹2,640 crore, led by lower royalties and other expenses.
NMDC’s shares have gained about 16% so far in 2026, and trade at an enterprise value of 6-6.5 times its FY27 estimated Ebitda, as per various brokerages. While the price trend looks favourable currently, the medium-term trajectory may not be very favourable. “Although we maintain our positive stance on iron ore demand in FY27, steel capacity additions will likely slow in FY28/FY29, putting some pressure on prices,” noted ICICI Securities.
