New Delhi : NMDC Steel Limited has reported a strong improvement in profitability for the April–June 2026 quarter (Q1 FY2026-27). The company’s profit after tax (PAT) increased by nearly 98% year-on-year to ₹50.51 crore, compared with ₹25.56 crore in Q1 FY2025-26.
Revenue from operations also increased 8.8% to ₹3,661.84 crore, indicating higher business activity during the quarter.
Key Financial Highlights
| Particular | Q1 FY27 | Q1 FY26 | YoY Change |
|---|---|---|---|
| Revenue from Operations | ₹3,661.84 Cr | ₹3,365.22 Cr | +8.8% |
| Other Income | ₹42.89 Cr | ₹20.00 Cr | +114.5% |
| Total Income | ₹3,704.73 Cr | ₹3,385.22 Cr | +9.4% |
| Profit Before Tax | ₹73.95 Cr | ₹36.14 Cr | +104.6% |
| Profit After Tax | ₹50.51 Cr | ₹25.56 Cr | +97.6% |
| EPS | ₹0.19 | ₹0.09 | +111.1% |
| Total Expenses | ₹3,630.78 Cr | ₹3,349.08 Cr | +8.4% |
| Net Worth | ₹13,228.35 Cr | ₹13,140.04 Cr | +0.7% |
Profitability Improves Despite High Costs
Although NMDC Steel’s profit almost doubled, its margins remain under pressure because of substantial finance and depreciation costs.
During Q1 FY27:
- Finance cost: ₹126.38 crore
- Depreciation & amortisation: ₹242.12 crore
- Total expenses: ₹3,630.78 crore
- Profit before tax: ₹73.95 crore
- Profit after tax: ₹50.51 crore
The company’s total comprehensive income stood at ₹55.15 crore.
Expense Breakdown
| Expense Head | Q1 FY27 |
|---|---|
| Cost of Materials Consumed | ₹2,509.37 Cr |
| Changes in Inventories | (₹121.36 Cr) |
| Employee Benefit Expense | ₹31.23 Cr |
| Finance Cost | ₹126.38 Cr |
| Depreciation & Amortisation | ₹242.12 Cr |
| Other Expenses | ₹843.04 Cr |
| Total Expenses | ₹3,630.78 Cr |
Material consumption remained the largest expense component at ₹2,509.37 crore.
Debt Position Improves
NMDC Steel’s total borrowings declined to ₹5,056.15 crore as of June 30, 2026, compared with ₹5,709.82 crore a year earlier.
| Parameter | Q1 FY27 | Q1 FY26 |
|---|---|---|
| Total Borrowings | ₹5,056.15 Cr | ₹5,709.82 Cr |
| Interest Cost | ₹126.38 Cr | ₹133.68 Cr |
| Debt-Equity Ratio | 0.38 | 0.43 |
| Debt Service Coverage Ratio | 0.17 | 0.16 |
| Interest Coverage Ratio | 1.59 | 1.27 |
The lower debt-equity ratio and improved interest coverage indicate some improvement in the company’s debt position.
₹4,476 Crore SBI Term Loan
NMDC Steel has a major rupee-denominated term loan from State Bank of India.
Term Loan Position
- Sanctioned amount: ₹4,476.20 crore
- Amount drawn: ₹4,475.81 crore
- Outstanding as of June 30, 2026: ₹3,177.27 crore
- Repayment made: ₹1,298.54 crore
- Current interest rate: 8.40% per annum
- Repayment: 30 quarterly instalments
- Repayment period: March 2024 to June 2031
- Default: No default
The interest rate has undergone several revisions. It was initially linked to the six-month MCLR, later reset to 12.45% from March 1, 2025, before being reduced to 8.70% from April 12, 2025 and subsequently to 8.40% from January 12, 2026.
Working Capital Facilities
The company has total working capital limits of ₹4,100 crore.
| Facility | Sanctioned | Utilised |
|---|---|---|
| Fund Based | ₹2,600 Cr | ₹1,870.73 Cr |
| Non-Fund Based | ₹1,500 Cr | ₹1,005.64 Cr |
| Total | ₹4,100 Cr | ₹2,876.37 Cr |
The applicable interest rate on working-capital borrowings is 8.40% per annum from January 12, 2026.
GST Dispute of ₹111.19 Crore
The company has also disclosed a GST-related dispute pertaining to the pre-demerger period from July 2017 to March 2021.
The total disputed amount is ₹111.19 crore.
| Status | Amount |
|---|---|
| Accepted & Reversed/Paid | ₹8.45 Cr |
| Dropped | ₹45.90 Cr |
| In Abeyance, pending High Court proceedings | ₹56.40 Cr |
| Under Appeal | ₹0.35 Cr + interest & penalty |
| Interest Paid | ₹0.09 Cr |
The disputes relate to the period before the demerger, with NMDC Limited pursuing the applicable appeals under the demerger scheme.
Strategic Disinvestment
The government’s proposed strategic disinvestment of NMDC Steel remains an important long-term development.
Key milestones include:
- October 27, 2016: CCEA approved in-principle strategic disinvestment of the NISP unit.
- October 14, 2020: Demerger approved.
- Government plans to divest 50.79% stake in NMDC Steel to a strategic buyer.
- After identification of the strategic buyer, the government intends to offer 10% stake to NMDC Limited.
The eventual strategic investor could therefore have a significant impact on NMDC Steel’s ownership structure and future expansion strategy.
Other Key Disclosures
As of June 30, 2026:
- NMDC Steel had no subsidiaries, joint ventures or associates.
- The company reported no deviation in utilisation of public issue proceeds.
- There were no outstanding defaults on loans or debt securities.
- The company operates as a single segment — Iron & Steel Products.
- Related-party transactions are being filed in XBRL format.
Board Meeting
The financial results were considered at the Board meeting held on August 14, 2026.
- Meeting started: 4:45 PM IST
- Meeting concluded: 5:25 PM IST
What the Results Mean
NMDC Steel’s Q1 FY27 numbers show a clear improvement in profitability, with PAT rising from ₹25.56 crore to ₹50.51 crore and PBT more than doubling.
However, the company’s earnings remain relatively thin compared with its large revenue base because of high material costs, depreciation and finance expenses.
The decline in borrowings and reduction in the interest burden are positive developments, while the strategic disinvestment process and pending GST dispute remain important factors for investors to monitor.
Bottom Line
NMDC Steel delivered a stronger Q1 FY27, with revenue up 8.8% and profit up 97.6% year-on-year. Nevertheless, the company continues to operate with significant debt and high fixed costs. Future profitability will depend on production and sales growth, cost control, financing costs and the progress of the government’s strategic disinvestment plan.
Disclaimer: This is an analysis of the financial information provided and is for informational purposes only. It should not be treated as investment advice.
