1. At a Glance – The PSU That Mines Cash (Literally)
NMDC is that classic PSU uncle who owns half the land in the village, earns absurd cash flows, pays decent pocket money (dividends), but refuses to jog faster than a morning walk. Market cap ₹71,644 crore, stock chilling around ₹81.6, dividend yield a juicy 4.04%, ROCE flirting at 29.6%, and ROE flexing at 23.6%. On paper, this is not a sick PSU story — this is a cash-generating iron ore machine.
Q3 FY26 revenue came in at ₹7,611 crore, up 15.9% YoY. PAT stood at ₹1,757 crore, down 6.7% YoY. Margins? Still elite. Operating margin at 28% in the latest quarter, though clearly lower than NMDC’s glory days of 35–40% OPM. EPS for the quarter printed ₹2.00, taking TTM EPS to ₹7.85.
Valuation? 10.4x earnings when the industry PE is hovering near 19.4x. That discount isn’t accidental — it’s PSU seasoning mixed with commodity cyclicality. Still, for a company that literally digs iron out of the ground at some of the lowest costs globally, this pricing looks… suspiciously cheap. Or is it a value trap with a government moustache? Let’s dig.
2. Introduction – A Mining Giant with Government DNA
NMDC was born in 1958, when India believed steel plants solve everything — economy, employment, maybe even heartbreak. Fully owned by the Government of India under the Ministry of Steel, NMDC’s job description is simple: dig minerals, sell them, fund half the exchequer, repeat.
Today, NMDC is India’s largest iron ore producer and the sixth largest globally. It operates massive, highly mechanised iron ore complexes in Chhattisgarh and Karnataka with installed capacity of ~51 MnT, targeting 53.8 MnT by FY25 and an audacious 100 MnT by 2030. That’s not ambition — that’s “we own the land anyway” confidence.
But NMDC is not just iron ore. There’s diamond mining at Panna (yes, actual diamonds), pellet production, sponge iron, wind power, coal blocks, Australian exploration, Mozambique coal exposure, and an R&D centre with patents. Sounds exciting — until you remember it’s a PSU, and excitement moves at government file speed.
So the real question isn’t whether NMDC has
assets. It’s whether it can sweat those assets efficiently without getting tangled in penalties, unions, bureaucracy, and policy mood swings. Ready to judge?
3. Business Model – WTF Do They Even Do?
Think of NMDC as India’s landlord of iron ore. It doesn’t chase customers; customers chase it. Steel plants need iron ore. NMDC has iron ore. End of story.
The company mines high-grade iron ore (64% Fe content — chef’s kiss) and sells it primarily domestically. Pricing is linked to market benchmarks but moderated by government expectations, which means NMDC rarely enjoys commodity supercycle profits to the fullest — but also doesn’t die when cycles turn ugly.
Beyond mining:
- Pellets: NMDC produces and sells iron ore pellets — value addition with better margins.
- Diamonds: Operates India’s only mechanised diamond mine at Panna, restarted in FY24 after a three-year nap.
- Coal: Tokisud North coal mine has commenced mining in Jan 2026, capacity 2.3 MT per year.
- Wind Power: Small but green brownie points.
- Overseas Assets: Legacy Iron Ore (Australia) and ICVL stake (Mozambique coal).
Cost structure is NMDC’s superpower. With captive mines, mechanisation, and scale, it’s one of the world’s lowest-cost iron ore producers. When prices fall, private players bleed. NMDC shrugs and keeps paying dividends.
But tell me honestly — if you owned land that printed cash, would you innovate aggressively… or just collect rent forever?
4. Financials Overview – The Numbers Don’t Lie (They Just Yawn)
