NMDC shares up 2% as company raises iron ore prices by 4–7%; stock has jumped 132% in 1 year

NMDC share price:  Shares of NMDC Limited, the public sector undertaking (PSU) involved in the exploration of iron ore, copper, rock phosphate, limestone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, and coal, were in focus on Tuesday, April 30, as the company last evening announced that it has increased the prices of iron ore by 4–7 per cent. 

In the opening deals, the stock was trading 2 per cent higher at Rs 260 on the BSE. 

Manganese prices in the international market have been skyrocketing, as per reports. 

The price of lump ore has been increased to Rs 6,200 per tonne from Rs 5,800 earlier, while the fines' price has been increased to Rs 5,260 from Rs 5,060 earlier per tonne.

Shares of the company have zoomed 132 per cent in the past 12 months. In comparison, the S&P BSE PSU index has jumped 94.5 per cent while the benchmark S&P BSE Sensex has gained nearly 22 per cent. 

NMDC is a Navratna company under the administrative control of the Ministry of Steel, Government of India.

Recently, LKP Securities initiated coverage on NMDC with a buy rating. The brokerage cited the following reasons for initiating the coverage:

• NMDC stands to capitalise on rising steel demand as India’s steel industry doubles by 2030. 
• This PSE is poised to be a key beneficiary of a potential repeat of the 2003–2007 capex boom, given the resemblance of the current economic landscape to that of 2003–2008.
• Aggressive mine capacity expansion to meet upcoming demand;
• Abundant availability of high-quality ores for the next 40 years.

"We initiate NMDC at 6.5x FY26E EV/EBITDA to arrive at a target price of Rs 297. Over FY24E–26E, we expect NMDC to clock a revenue/EBITDA/PAT CAGR of 12.9%/18.8%/19.1%, respectively," the brokerage said.