Citi and Kotak Institutional Equities have both reiterated ‘Sell’ ratings on NMDC, citing risks of further price corrections in the domestic iron ore market. Citi has set a target price of ₹60, while Kotak has pegged its target at ₹55.
According to Citi, NMDC’s current price premium to export parity stands at over 40%, compared to the FY25 average of 20%. The brokerage expects this premium to normalize, especially as domestic steel prices correct amid rising imports in May 2025, outpacing April volumes.
Further, Llyods Metal and Energy’s plan to ramp up its iron ore capacity from 10 million tonnes to 25 million tonnes in FY26 could also put pressure on prices. Global iron ore supply is expected to remain in modest surplus, especially with Simandou volumes entering the market next year, Citi warned.
Kotak, meanwhile, highlighted NMDC’s 2.5% month-on-month price cut in June, and believes more reductions could follow. It noted that domestic iron ore prices are now at just an 8% discount to import parity, compared to the historical 20%, signaling a possible price normalization phase. The ongoing weakness in steel prices and increase in merchant mining output further exacerbate the pressure on NMDC’s pricing power, the brokerage added.
