NMDC shares decline 4% after Q1 results. Should you buy, sell or hold the stock?

Iron ore production rose 26% YoY to 151.17 lakh tonnes in Q1FY27 from 119.94 lakh tonnes a year earlier. Iron ore sales, however, increased 2% to 117.30 lakh tonnes from 115.17 lakh tonnes. Ore transferred for pellet job work rose 46% to 8.19 lakh tonnes from 5.60 lakh tonnes.

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EBITDA and margin stood at Rs 2,817 crore and 41%, respectively, compared with Rs 2,777 crore and 42% in Q1FY26. Profit before tax increased 2% to Rs 2,692 crore from Rs 2,644 crore.

Average domestic realisation increased 4% to Rs 5,548 per tonne from Rs 5,353 per tonne in Q1FY26. Iron ore sales revenue stood at Rs 6,508 crore, up 6% from Rs 6,165 crore a year earlier. Revenue from other sales declined 39% to Rs 287 crore from Rs 469 crore.

Buy, sell, hold NMDC shares?

Motilal Oswal maintained its Buy rating on NMDC with a target price of Rs 98, implying 16% upside. The brokerage said NMDC reported healthy earnings in the quarter, supported by healthy average selling prices that offset muted quarter-on-quarter volumes. It expects production volumes to rise to around 60 million tonnes in FY27, driven by an increase in the environmental clearance limit and a new mine under the joint venture. JM Financial has maintained a Reduce rating on NMDC with a target price of Rs 87, implying around 3% upside. On operations, NMDC is targeting 60 million tonnes of production in FY27 and 100 million tonnes by 2030, with incremental volumes expected from Deposit 14, NMZ, Kumaraswamy and other mines. JM Financial said volume growth and capex execution remain key factors to monitor.

NMDC Q1 highlights

Total income rose 3% to Rs 7,142 crore from Rs 6,932 crore. Interest income from deposits with banks increased 16% to Rs 212 crore from Rs 183 crore, while other income rose 17% to Rs 135 crore from Rs 115 crore.Read more:Nifty outlook: Further dips possible before a move towards 25,100, says Anand James

Total expenses increased 4% to Rs 4,450 crore from Rs 4,288 crore. Royalty and other levies rose 31% to Rs 1,644 crore from Rs 1,255 crore, while the additional amount representing 150% of royalty increased 30% to Rs 1,851 crore from Rs 1,425 crore. Pellets job-work expenses rose 23% to Rs 248 crore from Rs 202 crore, while operating expenses increased 34% to Rs 1,801 crore from Rs 1,349 crore.

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