Saturday, September 01, 2012

Despite a fall in profits in the last fiscal

Despite a fall in profits in the last fiscal, nmdc is still among the top 20 profit makers in the country. But will the honeymoon continue for the mining giant? Deepak Ranjan Patra finds out... 

Meanwhile, considering NMDC’s ambitious expansion plans, the first quarter results seem to be just the beginning of another era for it. With intentions to diversify, the company at present is setting up a 3 MTPA steel plant in Chhatisgarh and two pellet plants with installed capacity of 1.2 MTPA and 2 MTPA in Chhatisgarh and Karnataka, respectively with a capex of `26.5 billion to be spent over the next five years. As expected, once the plants become fully functional, NMDC will witness huge rise in its cash flows from FY2013 onwards. Moreover, in order to securitise its position and expand its reach in the global arena, the company is currently looking forward to acquire mines in regions like Africa, South America and also Australia.

But then, before stepping into the future, NMDC has to deal with the biggest problem of iron ore pricing. While metal prices are on rise in the global market, the company has so far passed on only two-third of the increased cost to its customers. So, the question remains that for how long can NMDC sustain the same stand without getting its bottom-line affected?

Nevertheless, the company sounds confident to sail through the odds as Raghavan says, “The year ahead holds much promise for NMDC. It will excel its performance through the next three quarters and achieve all-time high records.”


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