Its consolidated operating profit stood at ₹2,140 crore, down 10 per cent Y-o-Y. This fall was primarily caused by higher other costs, which rose 70 per cent Y-o-Y. Royalty as a per cent of sales stood at 39.3 per cent in Q3FY26 vs 46.2 per cent in Q3FY25. The adjusted net profit stood at ₹1,760 crore, down 7 per cent Y-o-Y and up 3 per cent Q-o-Q, close to the street consensus estimates.
Iron ore production stood at 14.7 million tonnes (mt), up 11 per cent Y-o-Y and up 44 per cent sequentially, with sales volumes of 12.7 mt, up 6 per cent over the year-ago period.
In the first nine months of 2025-26 (M9FY26), revenue grew 23 per cent while operating profit rose 9 per cent Y-o-Y to ₹20,730 crore and ₹6,620 crore, respectively, due to volume growth and good net sales realisations. The adjusted net profit increased 7 per cent Y-o-Y to ₹5,420 crore. The sales volume rose 10 per cent Y-o-Y to 34.9 mt and ASP increased 11 per cent Y-o-Y to ₹5,934 per tonne. Operating profit per tonne for M9FY26 stood at ₹1,900, down ₹34 Y-o-Y, but the trend shows increased pressure on margins.
Given an increase in environmental clearances limit, volumes could cross 51 mt in FY27 and 54 mt in FY28. Given strong demand from domestic industry, NMDC, with prices at 28 per cent discount to import parity, is well-placed in terms of potential upside from hikes. However, global ore prices could slip if the latest Chinese stimulus plan is not successful and, therefore, the country would absorb less ore.
NMDC has a high planned capex of over ₹70,000 crore for evacuation and capacity enhancements over the next four-five years. NMDC had earlier guided for capex of ₹4,000 crore in FY26. In January this year, NMDC started mining in Tokisud North Coal Mine, Jharkhand, for thermal coal. Capex will rise substantially from the second half of 2026-27 (H2FY27) with over ₹10,000 crore to be spent in each of FY27 and FY28. The volume growth and capex execution are monitorables. In a strategic move to diversify its mineral portfolio, the board approved the incorporation of a new wholly owned subsidiary focused on critical minerals. It remains to be seen how this works out.
The company targets 100 mt production by FY29-FY30. It should be able to generate sustained operating cash flow over FY26-FY28 to support capex without putting undue pressure on the balance sheet. It is likely to be able to sustain dividend payouts despite the capex.
There is increasing competition from captive mining while the demand by Karnataka for mineral tax creates a potential liability of ₹15,165 crore, though the management believes such a levy would be contractually recoverable from customers. Also, the timeline for the targeted environmental clearance limits for increasing production may be delayed. Investors should be conservative in terms of volume assumptions due to the environment factor.
NMDC Steel reported 42 per cent growth Y-o-Y (down 11 per cent Q-o-Q) in revenues to ₹3,007 crore in Q3FY26. Operating profit for the quarter was reported at ₹97.5 crore, down 53 per cent Q-o-Q due to lower realisations and higher employee expenses, which rose 136 per cent Q-o-Q. The new labour codes have led to an estimated incremental impact of ₹17.8 crore under employee benefit expense. Finance costs have dropped 23 per cent Y-o-Y, giving some relief. The adjusted net profit remained negative during the quarter, with a loss of ₹244 crore versus a loss of ₹115 crore in Q2FY26. NMDC has outstanding recoverables of ₹6,790 crore from NMDC Steel, and the management is confident of recovery.
 "NMDC")