NMDC shares tank 6% after Q1 revenue drops 16% QoQ

The iron ore miner on August 12 posted an 18.2% surge in consolidated net profit at ₹1,963.35 crore for Q1FY25, as compared to ₹1,661.04 crore in the same period a year ago. Sequentially, the net profit increased 38.69% from ₹1,415.62 crore compared to the last quarter of FY24.

Revenue from operations remained almost flat at ₹5,414.19 crore, up 0.36%, against ₹5,394.66 crore in the corresponding period in the preceding fiscal. However, on a quarter-on-quarter (QoQ) basis, the revenue from operations declined 16.56% from ₹6,489.31 crore in Q4FY24.

The state-owned company's EBITDA (earnings before interest, tax, depreciation, and amortisation) increased 19.72% YoY in Q1FY25 to ₹2,725 crore compared to ₹2,276 crore in the year-ago period.

Last month in July, the company announced a cut in iron ore prices for July. NMDC announced a reduction of ₹500 per tonne in the prices of lump ore and fines, effective from June 30.

The company reduced the prices of lump ore to ₹5,950 per tonne from ₹6,450 per tonne for June.

The company’s total iron ore production fell to 9.19 million tonnes in April-June 2024, down from 10.7 million tonnes in the same period in 2023. Iron ore sales also declined to 10.07 million tonnes compared to 11.15 million tonnes a year earlier.

Meanwhile, the leading mining stock traded lower on Wednesday after the Supreme Court upheld its July 25 judgment enabling state governments to levy tax on mining and related activities. The apex court held that the recovery of taxes on mining activities will be applicable retrospectively.

The Supreme Court ruled that while states have the authority to impose and renew taxes, they cannot apply these tax demands to transactions that occurred before April 1, 2005.

The court said that tax payments can be made in installments over 12 years starting from April 1, 2026. It also ordered that any interest or penalties imposed up until July 25, 2024, will be waived, according to a report by Bar and Bench.

Shares of the NMDC Ltd were trading at ₹210.92 apiece, down 6.03%, on the NSE at 3:14 pm.