Motilal Oswal has reiterated a BUY call on NMDC and pegged a target price of Rs 106, implying about 15% upside from the current market price of Rs 92. The brokerage’s core argument is straightforward: earnings are holding up, volumes are climbing, and the company is pushing ahead with a sizable expansion plan that could lift production toward 100 mt by FY30.

Summary

NMDC’s latest quarterly update lands with a familiar but important message: the iron ore major is not just defending its base business, it is preparing for a larger industrial footprint. The company delivered broadly in-line earnings in 4QFY26, helped by stronger volumes and steady realizations, while management also outlined an ambitious production and capex roadmap. Motilal Oswal sees the stock as attractively valued at 6.1x FY28 EV/EBITDA and 1.7x FY28 P/BV, and expects near-term benefits from volume growth, cost efficiencies, and stable ore prices.

Quarterly Pulse

Revenue came in at Rs 113 billion on a consolidated basis, with third-party value-added sales contributing Rs 30 billion in 4QFY26. Excluding that one-off trading arrangement, revenue was Rs 84 billion, up 20% year on year and 22% quarter on quarter, mainly because production and sales volumes improved sharply. Iron ore production rose to 16.3 mt, while sales reached 15.3 mt, both setting a strong tone for the quarter.

Operating profitability remained healthy, even if not spectacularly ahead of estimates. EBITDA was Rs 25.3 billion, up 24% year on year and 25% sequentially, while EBITDA per ton improved to Rs 1,656. Adjusted PAT came in at Rs 19.5 billion, higher than a year ago but modestly below the brokerage’s expectation. The larger takeaway is that the business remains highly cash-generative, even in a quarter where prices were largely stable.

What Management Said

NMDC is betting on volume, not a dramatic pricing swing. Management expects iron ore prices to stay broadly range-bound in the near term, with no major volatility flagged for the current quarter. The company has guided for 60 mt of production in FY27, including 58.5 mt from standalone operations and the balance from newly commissioned JV mines. That is a meaningful step up from FY26’s 53.2 mt production and signals confidence in the operating ramp-up.

Cost discipline is becoming a strategic advantage. At Bacheli, mining cost has fallen from about Rs 1,000 per ton to Rs 810 per ton in FY26, and management expects further gains in FY27. The company believes this will help sustain iron ore EBITDA margins in the 42-43% range. In a commodity business, that kind of margin resilience can be more valuable than a short-lived price spike.

Expansion Roadmap

The capex plan is aggressive and clearly long dated. NMDC spent Rs 33 billion in FY26, plans Rs 60 billion in FY27, and then sees annual capex of Rs 70-100 billion during FY28-FY30. Near-term project awards worth Rs 150-200 billion are expected to support the broader capacity expansion roadmap. The end goal is a 100 mt production platform by FY30, which would materially reshape the company’s scale.

The mine-by-mine roadmap is especially telling. Kirandul is expected to rise from roughly 21 mtpa to 30 mtpa, while Bacheli is targeted to grow from 18-19 mtpa to around 35 mtpa by FY30. Kumaraswamy is likely to stabilize at about 17 mtpa, Deposit-4 is set to contribute 7 mtpa, and Deposit-13 is being positioned for 10 mtpa initially, with a longer-term path to 20-21 mtpa. The railway doubling project between Kirandul and Jagdalpur should also improve evacuation capacity over time.

Beyond Iron Ore

NMDC is quietly building optionality outside its core iron ore franchise. The Tokisud coal mine has started overburden removal, with coal production expected from 2QFY27 and FY27 revenue potential of Rs 5-6 billion. The Rohne coal block is also being readied, though it is unlikely to contribute meaningful production in FY27 because of initial stripping requirements. Over time, management sees coal operations scaling into a much larger revenue stream.

Critical minerals and rare earths could become the next leg of growth. NMDC has entered a partnership with GMDC and is exploring investments of Rs 20-30 billion in FY27 across lithium, rare earths, and other strategic minerals. The company is also working on a blending hub at Vizag, backed by an approved Rs 30 billion investment, to produce branded iron ore with more consistent specifications and better pricing power. That could improve quality differentiation and strengthen NMDC’s position with steelmakers.

Valuation And Targets

Motilal Oswal says the stock trades at 6.1x EV/EBITDA and 1.7x P/BV on FY28 estimates, which it views as reasonable given the company’s earnings trajectory and balance sheet strength. The brokerage has raised its volume assumptions for FY27 and FY28, while trimming blended ASP assumptions slightly, and still expects revenue to reach Rs 318 billion in FY27 and Rs 336 billion in FY28. EBITDA is projected at Rs 108 billion in FY27 and Rs 117 billion in FY28, with PAT expected at Rs 85 billion and Rs 91 billion, respectively.

Investor View

For investors, the stock is a classic combination of asset quality, cash flow, and policy-linked upside. NMDC has a net cash position, a strong dividend profile, and a production roadmap that is still unfolding. The key risks remain iron ore price normalization, execution delays in capex and mine commissioning, and the possibility that some diversification plans take longer than expected. Even so, the current setup suggests a company entering a more expansive phase rather than one merely grinding out mature-cycle earnings.

Final Word

The market is getting a company with better volumes, improving costs, and a longer runway for growth. On Motilal Oswal’s framework, NMDC is still a BUY, and the Rs 106 target reflects confidence that the next few years may bring not just incremental earnings, but a broader re-rating in scale and strategic relevance.