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NMDC Ltd.

BSE: 526371 Sector: Metals & Mining
NSE: NMDC ISIN Code: INE584A01023
BSE 00:00 | 02 Mar 133.80 2.20
(1.67%)
OPEN

134.95

HIGH

134.95

LOW

131.60

NSE 00:00 | 02 Mar 133.85 2.30
(1.75%)
OPEN

134.20

HIGH

134.85

LOW

131.60

OPEN 134.95
PREVIOUS CLOSE 131.60
VOLUME 1269369
52-Week high 134.95
52-Week low 62.00
P/E 10.35
Mkt Cap.(Rs cr) 39,211
Buy Price 133.30
Buy Qty 185.00
Sell Price 133.80
Sell Qty 475.00
OPEN 134.95
CLOSE 131.60
VOLUME 1269369
52-Week high 134.95
52-Week low 62.00
P/E 10.35
Mkt Cap.(Rs cr) 39,211
Buy Price 133.30
Buy Qty 185.00
Sell Price 133.80
Sell Qty 475.00

NMDC Ltd. (NMDC) - Chairman Speech

Company chairman speech

With a strong balance sheet world-class portfolio and smart people across ourorganisation we are well positioned to leverage on our opportunities and to create newbusiness verticals. High productivity through mechanised and sustainable mining skilledmanpower customer focus maximising shareholder's wealth inclusive development amongstothers are our value drivers as we forge ahead on our journey to satisfy India's demandfor steel.

Dear Stakeholders

FY2019 was a satisfying year given the complex global and domestic dynamics we arewitnessing in front of us. This achievement could only be possible because of the strongvalues and culture that your Company stands for.

ECONOMY

After a GDP growth up to 8% in Q1 FY2019 economic activity slowed down in Q2 ledmainly by a large drag from net exports which became entrenched in Q3 due to decelerationin public spending and private consumption. On the supply side agriculture and alliedactivities characterised by a modest growth in kharif and horticulture production.Industrial growth also decelerated led by a slowdown in manufacturing activity. Howeverservices sector activity remained resilient supported primarily by constructionfinancial services and public administration and defence. Despite a challenging year theIndian economy continued to remain the world's fastest growing large economy. During thefiscal the overall economic scenario remained under stress with GDP growth slowing downgradually each quarter to 5.8% for Q4 FY2019 making annual GDP growth of 6.8% forFY2019*. With this economic backdrop a spate of policy reforms to develop and propel theeconomy have been introduced with more on the anvil. The growth in savings theincreasing formalisation of the economy rapidly growing digitisation across variouseconomic activities; and the continuing entrepreneurship and aspirations of the populationis driving both demand as well as innovation in the industrial and services sectors of theeconomy. These attributes along with a well monitored regulatory mechanisms make it aresilient economy.

INDUSTRY TRENDS AND NMDC

India has emerged as the fastest growing major economy in the world and is expected tobe one of the top economic powers of the world over the next 10-15 years backed by strongpolicies and reforms by the Government supporting higher growth. The thrust of Governmentof India to enhance spending on infrastructure augurs well for the steel industry andthereby the iron ore sector. In the near term your Company is bullish on the growthprospects of India's steel industry with its competitive advantages and the impetus beinggiven by the government to the steel sector. The envisaged growth in key sectors willfacilitate more consumption and demand for steel from sectors such as infrastructurehousing railways consumer durables and automobile. The persistent demand of high gradeore should help NMDC in improving its performance in terms of volumes as well as EBITDAmargins. Coupled with growing urbanisation; rising income levels of the burgeoning Indianmiddle class; Government initiatives such as Make-in-India Freight corridors 100 Smartcities Rural electrification and Housing for all by 2022 NMDC sees a bright future forthe mining and steel industry.

Worldwide environmental concerns in mining iron and steel sector plant closures inChina mainly Induction Furnace and Blast Furnace with low volume and supply disruptionsin two of the largest global ore producers mean that the price for steel will remainstable if not get firmer. Continuous thrust by the government to use domesticallymanufactured iron and steel products in government procurement as well as anti-dumpingrestrictions on steel imports in the country on account of measures being taken byGovernment of India bode well for NMDC and the iron ore mining industry.

PORTFOLIO

NMDC's current mining capacity stands at 43mn tonnes. We are already India's largestiron ore producer and going forward we are targeting substantial increase in miningcapacity by improving our evacuation capabilities in Chhattisgarh by doubling the KK linefrom Kirandul to the Jagdalpur line by 12 MTPA in our existing operations. We are alsoplanning to develop 15 MTPA of greenfield mines (JV with CMDC).

PERFORMANCE

During the year under review your Company has earned profit before tax of Rs. 7199crore (up 16.50% YoY) on a turnover of Rs. 12153 crore (up 4.63% YoY) in comparison withprevious year's achievement of Rs. 6179 crore and Rs. 11615 crore respectively.

Your Company posted a PAT of Rs. 4642 crore up by 21.97% YoY while the net worth ofyour Company by end of the fiscal FY2019 stood at Rs. 25952 crore up by 6.56%. For theyear FY2019 I am pleased to inform you that your Company has achieved both production andsales of 32.36 MT despite Donimalai Mine being closed w.e.f. 04.11.2018. Your Company madecapital expenditure of Rs. 2090 crore (including investment) during the year underreview.

SHAREHOLDER RETURNS

During the year under review the Board of Directors of your Company at its meetingheld on 8th January 2019 approved a share buyback of 102040815 fullypaid-up equity shares of face value of Re. 1 each (representing 3.23% of the total numberof Equity Shares in the paid-up share capital of the Company) from all the existingshareholders / beneficial owners of Equity Shares on proportionate basis. This was donethrough the "Tender Offer" route at a price of Rs. 98 per Equity Share payablein cash for an aggregate consideration not exceeding Rs. 1000 crore .

In line with excellent track record set in earlier years your Directors have approvedDividend for FY2018- 19 @ Rs. 5.52 per share against Rs. 4.30 per share in the previousyear.

SOCIAL AND ECONOMIC CONTRIBUTION

Your Company believes that the well-being of the society at large is a pre-requisitefor progress of business and prosperity of the organisation. This has been the Company'sunderlying philosophy in its approach to society. NMDC continues to make significanteconomic and social contribution in the countries where it operates. During FY2019 wepaid Rs. 2590 crore in corporate taxes and made significant economic contribution to ouremployees and suppliers. We have pursued several activities that include Prayas - APursuit to Education;

Nirmaya - Towards Healthy Life; Prakalp - Creating Infrastructure; and Kaushal -Skilling People. I encourage you to read the CSR Annexure within the Directors' Report toknow more about the excellent work your Company and its employees

As we look to the future we see positive market conditions for India and we expectour growth agenda to be well absorbed by the ensuing growth in demand anticipated. AtNMDC we continue our strong focus on meeting our 2025 vision growth and value chainproductivity.

do towards social development for the people and the environment in the surroundingareas of our operations.

SUSTAINABILITY

Our sustainability strategy focuses on the areas that represents key challenges andopportunities that is Community Development Employee Welfare Scientific Mining EmployeeSafety Biodiversity Conservation Energy Efficiency and land reclamation. The Company hasconsciously aimed at surpassing legal compliance requirements and ensured that thepolicies and procedures related to ethical business practices are implemented.

OUR PEOPLE

Our success this year is due to the hard work and perseverance of our people and Ithank them for their dedication and enthusiasm. I am particularly grateful for theircommitment to making NMDC a safer more productive and more responsible company. Ouraspiration is to continue to be the pioneer of our industry with a culture that welcomesand nurtures new ideas and higher performance.

THE FUTURE

As we look to the future we see positive market conditions for India and we expectour growth agenda to be well absorbed by the subsequent growth in anticipated demand. AtNMDC we continue our strong focus on meeting our 2025 vision growth and value chainproductivity. Our partnership with society and our sustainability agenda must remainimportant priorities. We will continue to make every effort to keep our people safehealthy and equipped to meet the challenges of the coming years.

With a strong balance sheet world-class portfolio smart and dedicated people acrossour organisation we are well positioned to leverage on our opportunities and to createnew opportunities. We will continue to drive productivity and aim to deliver superiorvalue as we satisfy India's demand for steel.

N. Baijendra Kumar

Chairman-Cum-Managing Director

.