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NMDC Ltd.’s net sales declined 51% YoY and 30% QoQ to Rs 33 billion in Q2 FY23 (inline). Iron ore sales fell 6% YoY (up 8% QoQ) at 8.43 million tonne. YoY decline in iron ore sales reflects demand slow down in the merchant ore market.
Ebitda shrunk 73% YoY and 55% QoQ to Rs 8.5 billion, and was significantly lower than our estimate of Rs 12 billion despite in-line revenue, indicating higher than-estimated operating costs partly offset by lower royalty and additional premium as IBM prices come at a lag.
NMDC’s Ebitda/tonne at Rs 1,009 was down 71% YoY and 59% QoQ, which reflects higher costs as both sales volume and average selling price were in line.
Adjusted profit after tax fell 62% YoY and 40% QoQ to Rs 8.9 billion, 9% miss on our estimate of Rs 9.7 billion. While Ebitda miss was at 27%, adjusted profit after tax miss was just 9% due to significantly higher-than-estimated other income (up 3.8 times YoY/up two times QoQ).
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