NMDC Steel shares surge 18%, the most on record, after first ever profit

Shares of NMDC Steel Ltd. gained as much as 18% on Wednesday, August 13, after the demerged entity of state-run NMDC Ltd. reported results for the June quarter after market hours on Tuesday.NMDC Steel turned profitable for the first time during the June quarter, reporting a net profit of ₹26 crore, compared to a net loss of ₹547 crore during the same quarter last year.

NMDC Steel’s revenue increased by 66% from the year-ago period to ₹3,365 crore, while its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) stood at a positive ₹408 crore, compared to a loss of ₹401 crore during the same quarter last year.

EBITDA margin for the quarter stood at 12%.An increase in prices, ramp-up in capacities, resulting in increased operating leverage, contributed to NMDC Steel’s financial performance during the quarter.

Promoters of NMDC Steel have a 60.79% stake in the company at the end of the June quarter. Mutual Funds do not have a significant stake in the company, although Life Insurance Corporation of India (LIC) had a 14% stake in NMDC Steel at the end of the June quarter.

Foreign Portfolio Investors (FPIs) had a stake over 4% in NMDC Steel, while small retail shareholders, or those with authorised share capital of up to ₹2 lakh, had a 10.5% stake, among 7.69 lakh shareholders.

Shares of NMDC Steel are trading 18.3% higher on Wednesday at ₹42.36. The stock is still down 8% on a year-to-date basis despite this upmove.