1. At a Glance – The PSU Steel Baby Learns to Crawl
NMDC Steel Ltd is what happens when India’s largest iron ore miner decides, “Why just dig rocks when we can also melt them?” and then spends ₹24,000 crore doing exactly that.
Market cap sits at ₹12,084 crore, which is already lower than the capex spent on the Nagarnar Steel Plant. Yes, the plant cost more than the company’s current valuation. That’s not irony, that’s PSU poetry.
The stock trades around ₹41, roughly 0.93× book value, which on paper screams “cheap”. But then you look at ROCE (-13%), ROE (-16.6%), interest coverage (-0.91) and the PAT loss of ₹807 crore (TTM) and realise this isn’t cheap steel — it’s molten cash.
Q3 FY26 revenue came in at ₹3,008 crore, up 42% YoY, but the quarter still ended with a ₹244 crore loss. Operating margin was a thin 3%, which in steel terms is like showing up to a sword fight with a butter knife.
Debt stands at ₹5,310 crore, capacity utilisation is still ramping, and the plant only began commercial operations in September 2023. Translation: this company is barely out of the ICU and investors are already asking it to run a marathon.
So the big question:
👉 Is this a classic PSU turnaround-in-the-making, or a permanently tired blast furnace?
Let’s tear it apart — politely, with spreadsheets and sarcasm.
2. Introduction – From Iron Ore King to Steel Rookie
For decades, NMDC was a simple, beautiful story. Dig iron ore. Sell iron ore. Print cash. Pay dividends. Go home.
Then came the Nagarnar dream.
NMDC Steel Ltd was carved out as a separate entity to house the 3.0 MTPA integrated steel plant at Nagarnar, Chhattisgarh. The logic sounded solid on paper:
- Captive iron ore supply from Bailadila (just ~100 km away)
- No merchant mining price risk
- Vertical integration = higher value capture
What could possibly go wrong?
Well… everything that usually goes wrong when a mining PSU becomes a steel PSU.
Steel is not mining. Mining is about geology and logistics. Steel is about blast furnaces, coke rates, power costs, rolling yields, working capital, and timing cycles you don’t control.
The
plant saw:
- Delays
- Cost overruns
- Trial runs stretching forever
- Commercial operations only starting September 2023
- Losses piling up faster than slabs in a yard
By FY25, NMDC Steel reported ₹12,601 crore in revenue but still ended with a ₹2,374 crore loss for the year. Even on a TTM basis, PAT remains negative.
So yes, revenues are scaling. But profitability? That’s still waiting at the gate, asking for its ID card.
3. Business Model – WTF Do They Even Do?
NMDC Steel runs a fully integrated steel plant. This is not a mini-mill. This is the full buffet:
- Iron ore → sinter → hot metal → slabs → hot rolled coils
Product Portfolio
The plant produces:
- Low carbon steel
- HSLA steel
- Dual phase steel
- API-grade steel
Thickness range: 1 mm to 16 mm
Mill width: 1,650 mm (widest thin slab caster in the public sector)
End-use industries include:
- LPG cylinders
- Bridges and steel structures
- Railway wagons
- Pipes and pressure vessels
- Shipbuilding
- Defence and heavy engineering
Future roadmap includes:
- Automotive-grade steel
- Electrical steel for motors and transformers
In short, this is not commodity junk steel. This is aspirational, value-added steel.
But here’s the problem: aspiration doesn’t pay interest bills.
Steel margins depend on:
- Capacity utilisation
- Yield optimisation
- Power and fuel efficiency
- Stable product mix
Right now, NMDC Steel is still learning how to run the kitchen without burning it down.
4. Financials Overview – Growth With a Side of Pain
Quarterly Comparison Table (₹ crore)
| Metric | Latest Qtr (Q3 FY26) | YoY Qtr (Q3 FY25) | Prev Qtr (Q2 FY26) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 3,007.69 | 2,120.00 | 3,390.00 | 41.9% | -11.3% |
| EBITDA | 98 | -656 | 207 | NA | -52.7% |
| PAT | -243.97 | -758 | -115 | 67.8% | -112% |
| EPS (₹) | -0.83 | -2.59 | -0.39 | 68% | -113% |
