NMDC
Reco price: Rs 199;
Target price: NA
NMDC has cut prices of iron ore fines and lumps by 20 per cent and three per cent, respectively, for Q4’FY12 on the back of the decline in global iron prices, the recent rupee appreciation and increased export duty on iron ore. The price cut by NMDC is higher than analysts’ expectations, given the shortage of iron ore in the domestic markets. NMDC has also lowered its sales volume guidance for FY12 and FY13. The company now expects sales volumes of 27 million tonnes (mt) and 30 mt for FY12 and FY13, respectively, (earlier 30 mt and 33 mt). Although the company has five million tonnes of iron ore inventory at its mine pit-heads, it faces logistical constraints to increase offtake due to breakdown in slurry pipeline, lower availability of railway rakes and stricter regulations in transportation of iron ore in Karnataka. Neutral.
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