NMDC - First Cut
Rajesh Desai
Dear Sir/Madam,
NMDC announced its Q3FY13 results on 13th Feb, 2013.
The company arrived at net sales of INR2046.83 crore, which was down by 27.47% and 21.63% on YoY and QoQ basis due to volume de-growth and falling realizations. During the quarter, heavy rainfall led to the de-growth in volume coupled and iron ore price cut by ~5% hampered the iron ore realizations. The EBITDA for the quarter was INR1691.26 crore, which was down by 38.46% and 28.10% on YoY and QoQ basis. The company posted net profit of INR1292.8 crore, which was down by 30.45% and 22.98% on YoY and QoQ basis.
Key comments given by the management for the quarter:
· NMDC may implement new pricing policy by March- end of 2013 based on KPMG recommendations.
· Looking to acquire some assets in Brazil and Uruguay.
· The company is likely to invest INR30 billion in 3-4 years to boost capacity by 50%.
· Iron Ore demand exceeds supply at present.
· Action is on hand to sell unit of Silica sand Project, Lalapur. The PAT from the discontinued operations of Lalapur and UPFO for the nine months period ending INR1.99 crore is included in the results.
With ~40% market share in the iron ore producing industry, substantial high quality iron ore reserves, addition and expansion of mines leading to higher volume growth, superior margins backed by low cost of production, foray into value added projects and improved realization in future, NMDC is likely to outperform in coming years.
Valuations very attractive: At the CMP of INR147, the company is trading at P/E of 5.31x its FY14e EPS of 27.66 (Microsec Estimate). Hence, NMDC is “A DEFINITE STEAL AT CMP” with a target price of INR225 per share.
|
Particulars |
Q3FY13A |
Q3FY12A |
Q2FY13A |
YoY(%) |
QoQ(%) |
9MFY13 |
9MFY12 |
Var (%) |
|
Iron ore production |
5.36 |
7.15 |
5.38 |
-25.0% |
-0.4% |
17.64 |
20.3 |
-13.10% |
|
Iron Ore Sales Volume |
5.45 |
6.41 |
5.85 |
-15.0% |
-6.8% |
18.1 |
20.89 |
-13.36% |
|
Iron Ore sales |
2046.83 |
2822.0 |
2611.8 |
-27.5% |
-21.6% |
7496.6 |
8666.9 |
-13.50% |
|
Iron Ore Realization |
3755.7 |
4402.4 |
4464.7 |
-14.7% |
-15.9% |
4141.8 |
4148.8 |
-0.17% |
|
INR/US$ |
54.15 |
50.99 |
55.19 |
6.2% |
-1.9% |
54.51 |
47.16 |
15.59% |
|
Iron Ore Realization in US$ |
69.36 |
86.34 |
80.90 |
-19.7% |
-14.3% |
75.98 |
87.97 |
-13.63% |
|
China Iron Ore CFR prices |
120.58 |
140.79 |
112.12 |
-14.4% |
7.5% |
123.68 |
163.95 |
-24.56% |
|
NMDC Q3FY13 Results |
NMDC 9MFY13 Performance | |||||||
|
Particulars |
Q3FY13A |
Q3FY12A |
Q2FY13A |
YoY(%) |
QoQ(%) |
9MFY13 |
9MFY12 |
Var (%) |
|
Net Sales |
2046.83 |
2821.95 |
2611.84 |
-27.47% |
-21.63% |
7496.57 |
8666.88 |
-13.50% |
|
Other Operating Income |
0.86 |
0.23 |
0.14 |
|
|
3.45 |
0.43 |
|
|
Total Operating Income |
2047.69 |
2822.18 |
2611.98 |
|
|
7500.02 |
8667.31 |
|
|
Total Expenditure |
656.43 |
561.37 |
677.1 |
|
|
1871.85 |
1716.19 |
|
|
EBITDA |
1391.26 |
2260.81 |
1934.88 |
-38.46% |
-28.10% |
5628.17 |
6951.12 |
-19.03% |
|
EBITDA Margin (%) |
67.94% |
80.11% |
74.08% |
(1217)bps |
(614)bps |
75.04% |
80.20% |
(516)bps |
|
Other Income |
556.26 |
523.95 |
583.08 |
|
|
1691.48 |
1466.2 |
|
|
Operating Profit |
1947.52 |
2784.76 |
2517.96 |
|
|
7319.65 |
8417.32 |
|
|
Depreciation |
33.87 |
33.12 |
33.18 |
|
|
99.84 |
97.09 |
|
|
PBIT |
1913.65 |
2751.64 |
2484.78 |
|
|
7219.81 |
8320.23 |
|
|
Interest |
0 |
0 |
0 |
|
|
0 |
0 |
|
|
Exceptional Items |
0 |
0 |
0 |
|
|
0.00 |
0.00 |
|
|
PBT |
1913.65 |
2751.64 |
2484.78 |
|
|
7219.81 |
8320.23 |
|
|
Tax |
620.85 |
892.83 |
806.16 |
|
|
2342.39 |
2697.12 |
|
|
PAT |
1292.8 |
1858.81 |
1678.62 |
-30.45% |
-22.98% |
4877.42 |
5623.11 |
-13.26% |
|
PAT Margin (%) |
63.13% |
65.86% |
64.27% |
(273)bps |
(114)bps |
65.03% |
64.88% |
15bps |
|
|
|
|
|
|
|
|
|
|
|
Equity Capital |
396.47 |
396.47 |
396.47 |
|
|
396.47 |
396.47 |
|
|
Face Value |
1 |
1 |
1 |
|
|
1 |
1 |
|
|
No. of Outstanding shares |
396.47 |
396.47 |
396.47 |
|
|
396.47 |
396.47 |
|
|
|
|
|
|
|
|
|
|
|
|
EPS |
3.26 |
4.69 |
4.23 |
-30.45% |
-22.98% |
12.30 |
14.18 |
-13.26% |
|
Source: Company Data, Microsec Research. All data in INR crores unless specified. |
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Regards,
Team Microsec Research
Microsec Capital Limited
Tel: 91 33 30512100
Fax: 91 33 30512020
CA. Rajesh Desai
