NMDC Limited (NSE:NMDC) Just Released Its Second-Quarter Earnings: Here's What Analysts Think

Last week, you might have seen that NMDC Limited (NSE:NMDC) released its second-quarter result to the market. The early response was not positive, with shares down 7.4% to ₹223 in the past week. It was a workmanlike result, with revenues of ₹49b coming in 4.7% ahead of expectations, and statutory earnings per share of ₹19.02, in line with analyst appraisals. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for NMDC

Taking into account the latest results, the consensus forecast from NMDC's eleven analysts is for revenues of ₹241.5b in 2025. This reflects a meaningful 8.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 16% to ₹24.06. Before this earnings report, the analysts had been forecasting revenues of ₹237.5b and earnings per share (EPS) of ₹22.50 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at ₹242, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic NMDC analyst has a price target of ₹325 per share, while the most pessimistic values it at ₹180. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting NMDC's growth to accelerate, with the forecast 18% annualised growth to the end of 2025 ranking favourably alongside historical growth of 12% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect NMDC to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards NMDC following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple NMDC analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for NMDC (1 makes us a bit uncomfortable!) that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.