Systematix Hikes NMDC Target 16% on Volume Surge, Expansion Plans

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AuthorKavya Nair|Published at:
Systematix Hikes NMDC Target 16% on Volume Surge, Expansion Plans
Overview

Systematix brokerage has boosted NMDC's target price to Rs 95, signaling a potential 16% upside. The optimism stems from robust volume growth, with 9M FY26 production up 20% and sales up 10% year-on-year. NMDC is aggressively expanding iron ore capacity to 100mt by 2030, targeting 68mt within two years, supported by EC limit enhancements. The brokerage maintains a 'Buy' rating, factoring in revised volume and price assumptions.

Systematix brokerage initiated a fresh wave of optimism for NMDC Ltd. by raising its target price to ₹95 per share, a move implying a potential 16% upside from current trading levels. This upward revision is underpinned by the mining giant's consistently robust operational performance.

Volume Surge and Expansion Ambitions

The company has demonstrated significant momentum, with iron ore production and sales registering a healthy 20% and 10% year-on-year growth, respectively, over the nine-month period of fiscal year 2026. These figures bring NMDC closer to management's aspiration of achieving 55 million tonnes (mt) in annual volumes. Looking ahead, NMDC remains steadfast in its commitment to expand iron ore capacity to a formidable 100mt by 2030. The immediate focus is on reaching 68mt within the next two years, a target bolstered by applications for a 13mt Environmental Clearance (EC) limit enhancement at Deposit 4 and Deposit 13.

Systematix's Valuation and Outlook

The brokerage firm has retained its 'Buy' recommendation for NMDC. While acknowledging the need to moderate EBITDA estimates for FY26 and FY27 by 6% and 5% respectively – a revision accounting for a blend of adjusted volume and price assumptions – Systematix maintains a positive medium to long-term growth outlook. The firm's valuation methodology employs six times the FY28 estimated Enterprise Value to EBITDA.

Key Risks and Re-rating Levers

Despite the positive outlook, Systematix highlights potential headwinds. Weakening global iron ore pricing and a lower offtake from key markets are identified as principal risks that could impact the company's performance. Conversely, a consistent demonstration of month-on-month volume growth is expected to act as a significant re-rating driver for the stock.

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