India: NMDC posts robust FY’25 performance, eyes 55 mnt iron ore output in current fiscal FY’26

• Shift to high-grade pellets to drive FY’26 growth
• Nagarnar hits break-even, eyes better margins

NMDC, India’s largest iron ore producer, announced its Q4FY’25 (January-March 2025) results. The miner expects production in FY’26 to be at around 55.40 million tonnes (mnt) which is 100% of its Environmental Clearance (EC).

Performance highlights:

• Iron ore production dips in FY’25: The company reported FY’25 production at 44 mnt, down 2% y-o-y against 45 mnt in FY’24. However, iron ore production in Q4FY’25 inched up 1% y-o-y to 13.31 mnt despite logistical challenges during the quarter.
• Sales inch down in FY’25: Total iron ore sales dipped by 1% 44 mnt in FY’25. However, sales increased by 1% y-o-y in Q4FY’25 to 12.67 mnt demonstrating strong offtake in both domestic and export markets.
• Sales realisations increase: Average sales realisations were  recorded at INR 5,135/t in FY’25, an increase of 9% y-o-y from INR 4,732/t in FY’24.
• EBITDA rises 13% y-o-y: The company’s EBIDTA was recorded at INR 9,847 crore in FY’25, up against INR 8,709 crore in FY’24. Operating profit remained healthy, supported by increased volumes and effective cost management.
• PAT climbs up 19% y-o-y: NMDC’s profit after tax (PAT) jumped up by 19% y-o-y to INR 6,693 crore in FY’25 compared to INR 5,632 crore in FY’24, driven by steady margins and lower input costs.

Highlights from investors’ call:

• Nagarnar plant hits breakeven, eyes better margins: NMDC Steel Ltd (NSL)’s 3-mntpa integrated steel plant at Nagarnar, achieved breakeven at the EBITDA level in Q4FY’25. The plant operated at 90% capacity utilisation during March 2025, with further efficiency gains expected in FY’26.
• KIOCL pact, high-grade pellets to drive FY’26 growth: A conversion agreement on DRI-grade pellets with KIOCL is on, which is expected to positively impact topline performance. The company has given a guidance of pellet volumes of 2.5–3 mnt in FY’26. Additionally, a planned shift to high-grade pellets (Fe 66-67%) is set to enhance profitability through better realisations and improved product quality.
• Improved rail infra to improve dispatches: Enhanced railway infrastructure in Chhattisgarh, including new sidings, is expected to improve dispatch efficiencies and reduce evacuation bottlenecks.
• Capex guidance of INR 3,500 cr for FY’26: The company has outlined a consolidated capex of INR 3,500 crore, including INR 2,200 crore for NMDC and INR 1,300 crore for NSL, focusing on debottlenecking, expansion, and infrastructure augmentation.