01 — At a Glance
The Steel Plant That Lost Money, Then Almost Got Murdered By Valuation
- 52-Week High / Low₹49.6 / ₹28.4
- FY25 Revenue (Full Year)₹85.03 Cr (9M data)
- FY25 Net Loss (Full Year)-₹23.74 Cr
- Full-Year EPS (FY25)-₹8.10
- Q3 Revenue₹30.08 Cr
- Book Value₹44.4
- Price to Book0.84x
- Debt₹53.1 Cr (Sep 2025)
- Promoter Holding60.79% (Govt of India)
- FII Holding4.81% (Dec 2025)
The Auditor’s Confessional: NMDC Steel closed Q3 FY26 with ₹30.08 Cr revenue (+41.9% YoY), ₹244 Cr net loss, and a capacity utilisation of 76% — its highest since commissioning in August 2023. The company signed a 2-year SAIL offtake agreement guaranteeing minimum 30,000 MT monthly. India Ratings just upgraded the outlook to “Stable” from “Negative.” The stock has fallen -18.2% in 6 months. Welcome to the paradox that is PSU steelmaking — losing money while everyone around you gets excited.
02 — Introduction
When A ₹24,000 Crore Bet Is “Just Getting Started”
NMDC Steel Limited is what happens when the Government of India decides to build a 3 million-tonne-per-annum steel plant in Chhattisgarh, dumps ₹24,000 crores into it, watches it lose money for three years straight, and then tells equity markets everything is fine now. Newsflash: the market doesn’t believe in “just getting started” when there’s a -8.26% three-year ROE and negative interest coverage on the balance sheet.
The plant went live in August 2023. It’s taken 16 months to ramp up to 76% capacity utilisation. Three full years to sign a meaningful offtake agreement (with SAIL, no less — a CPSE like itself). And yet, the bond rating agencies are now saying “Stable Outlook.” Which is either the most contrarian take in Indian steel, or the most boring endorsement of a turnaround nobody asked for.
The company is integrated — it owns iron ore mines, has captive power generation (35-40%), meets coking coal through government channels, and is located 100 km from ore supply. Every structural advantage a steel plant could possibly have. And still, the cost profile has been brutal. Q3 FY26 saw EBITDA margins of just 3%, operating profit margins of 3.35%. This isn’t a margin compression story. This is a company still climbing out of a deep, dark hole.
But here’s the thing: the hole is getting shallower. SAIL bought 67.2% of 1HFY26 revenues. Capacity utilisation went from 29% (FY24) → 50% (FY25) → 76% (1HFY26). The company finished repaying ₹5.24 Cr of NCDs in August 2025. And for the first time since inception, operating EBITDA turned positive in 1HFY26.
From The Rating Agency Brief (Dec 2025): “Stabilisation of operations in 1HFY26; likely to improve further… we expect NSL to receive operational and managerial support from NMDC until its disinvestment by GoI.” Translation: the government is not letting this company fail. Ever.
03 — Business Model: WTF Do They Even Do?
A Steelmaker That Decided To Marry Its Raw Material Supplier
NMDC Steel operates a fully integrated greenfield steel plant at Nagarnar, Chhattisgarh. “Fully integrated” means: captive iron ore mines (100 km away, owned by parent NMDC), captive power generation (35-40% in-house, balance from grid), centralised coal procurement through government channels, and a Thin Slab Caster that can roll 1650mm wide HR coils — the widest in the public sector. It’s like India decided to build a steel plant that could never run out of raw materials even if it tried.
The product mix is where things get interesting: low-carbon steel, HSLA (High-Strength Low-Alloy), Dual Phase Steel, and API quality steel. These aren’t commodity grades. These are grades you find in LPG cylinders, marine vessels, high-pressure pipes, railway wagons, and precision equipment. SAIL’s 67% offtake in 1HFY26 is buying these volumes. Most of the rest is domestic market sales.
The economics are tortured right now because the plant is still ramping. When you’re running at 76% capacity, your fixed cost per tonne is brutal. The company’s depreciation alone is ₹95.3 Cr annualised (Q3 run rate). With just ₹30 Cr quarterly revenue, that math doesn’t work.
Crude Steel Capacity3.0 MTPAInstalled
Capacity Utilisation76%1HFY26
Commissioning DateAug 202316 months ago
Parent NMDCNavratna PSUGoI owned
Royalty Note: NMDC Steel doesn’t pay royalties to a UK parent. It is a subsidiary of NMDC Limited (the iron ore miner). Parent company support is implicit — not contractual. When the parent can’t help, government help kicks in. The question is: when does disinvestment kick in?
💬 Would you invest in a steel plant that’s losing money but has signed a 2-year SAIL offtake and is still 24% below installed capacity? Drop your analysis in the comments!
04 — Financials Overview
Q3 FY26: The Numbers That Confuse Everyone
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