NMDC Limited announced its performance for Q4 and FY 2024-25, highlighting significant growth and ambitious future plans:
- Financial Performance: The company reported a commendable performance for FY 2024-25, with a 19% year-on-year growth in PAT and 16% growth in PBT after exceptional items. This was achieved despite a loss of approximately 43-44 production days due to industrial issues.
- Production and Sales Targets: NMDC aims to increase its iron ore production from around 50 million tons to 100 million tons in the coming years. For FY26, the company has set an aspirational target of 55 million tons for both production and sales, aiming for 100% of its EC capacity.
- Capital Expenditure (Capex): FY25 saw the highest-ever capex of ₹3,700 crore. For FY26, capex is expected to be around ₹4,000 crore. The total sanctioned works amount to approximately ₹40,000 crore by Q2 FY26, with an additional ₹31,000-₹32,000 crore on the drawing board. This includes two slurry pipelines (Kirandul to Bacheli and Nagarnar to Vizag), estimated at ₹20,000 crore.
- Management Outlook: Mr. Amitava Mukherjee, Chairman and Managing Director, stated, "This coming year would be a transformational year for NMDC. And it will be taken as this watershed year where the foundations of the great leap would be put."
- Operational Improvements:
- Receivables: Outstanding receivables from RINL and NSL are actively being liquidated. NSL's outstanding is expected to be fully liquidated by the end of the year, and RINL has recommenced payments through bill discounting and direct payments.
- Nagarnar Steel Plant (NSL): The plant has shown a significant turnaround, with dispatches increasing from around 125,000 tons/month to 230,000 tons/month in March 2025 and 215,000 tons/month in April 2025. Production also increased, and cash collection rose from approximately ₹1,000 crore to ₹1,400-₹1,500 crore in March-April. The plant has become EBITDA positive on a monthly basis in March and April.
- KK Line Doubling: Only 20 kilometers (two sections) of the 131-kilometer line remain, with completion expected by the end of FY26.
- Vizag Land Acquisition: NMDC acquired 1,167 acres from RINL for approximately ₹1,500 crore, strategically located next to Gangavaram port. This land is planned for the termination of a slurry pipeline, an 8 million ton pellet plant, a mega blending yard (20-30 million tons capacity), and future mineral processing.
- Diversification and International Assets: NMDC is actively exploring international assets in 10 minerals, including coking coal, copper, lithium, cobalt, nickel, gold, and bauxite. An office has been opened in Dubai to coordinate African asset evaluations. The Rohne Coal Block in India is expected to become operational by Q3 or Q4 FY26.
- Pellet Operations: A conversion agreement with KIOCL for pellets generated revenues of ₹448 crore in FY25. For FY26, the target is to produce 3 million tons (full capacity of the KIOCL plant) of DRI-grade pellets, which is expected to significantly enhance profitability with an anticipated premium of $30-40 per ton in the international market. NMDC's own pellet plant in Karnataka and the Nagarnar pellet plant are also expected to become operational soon.
- Pricing Strategy: NMDC is transitioning towards an index-based or formula-based pricing mechanism for iron ore to ensure more predictive and frequent pricing that reflects market dynamics.
- Expenses: The jump in employee expenses in Q4 FY25 is primarily due to actual valuation adjustments, which are typically done in Q4. The increase in other expenses is attributed to new business verticals, including pellet exports and a marketing tie-up with NSL for HR coils.