The entire metal industry is experiencing significant activity due to increased demand and favourable pricing trends. Let's start with a focus on NMDC, a major player in the iron ore sector, which has recently raised prices for both iron ore lumps and fines by Rs 300 per tonne.

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Brokerage firm Antique maintains a 'buy' rating for NMDC, suggesting that the downward price trend observed thus far has come to an end. They see potential for price increases after the monsoon season, attributing this to robust demand, higher international prices, and continued strong domestic steel production.

On September 13, ICICI Securities upgraded its stance on NMDC from 'add' to 'buy,' raising the target share price to Rs 180 from Rs 130. They also increased their estimated EBITDA for FY24 by nearly 22 percent and adjusted the valuation multiple from 5 to 5.5 times on an EV to EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) basis. ICICI Securities believes that FY24 sales volume could surpass the previously targeted 30-40 million tonne per annum, and long-term volume prospects look promising, potentially leading to improved return on equity.

Turning to JSPL, Antique, one of the top gainers, also maintains a 'buy' recommendation for the company. They are optimistic about volume growth prospects, cost reduction efforts, margin-enhancing projects, and the company's prudent financial management. Antique anticipates that captive coal mining and reduced iron ore costs will drive cost reductions in the second half of FY24. Additionally, JSPL's ambitious capital expenditure plans are viewed as a positive factor contributing to their favourable outlook.

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First Published:Sept 14, 2023 5:52 PM IST