NMDC recovers on acquisition buzz

NMDC recovers on acquisition buzz

National Mineral Development Corporation was down 0.25% to Rs 9750 at 11:35 IST on BSE, off session’s low of Rs 9285.45 on reports that the company is scouting for iron ore and coal mines for acquisition, both in India and overseas.

Meanwhile, BSE Sensex was up 456.38 points or 2.75% to 17,064.39.

On BSE, 1,400 shares were traded in the counter. The scrip had an average daily volume of 1,600 shares in the past one quarter.

The stock hit a high of Rs 9900 so far during the day. The stock had a 52-week high of Rs 16,584.10 on 6 November 2007 and a 52-week low of Rs 1900 on 2 April 2007.

The mid-cap scrip had underperformed the market over the past one month till 12 February 2008, declining 20.89% compared to the Sensex’s decline of 19.88%. It had also underperformed the market in the past one quarter, declining 27.46% compared to Sensex’s decline of 16.66%.

The company’s current equity is Rs 132.16 crore. Face value per share is Rs 10.

The current price of Rs 9750 discounts its Q3 December 2007 annualized EPS of Rs 293.04, by a PE multiple of 33.27.

As per reports, National Mineral Development Corporation (NMDC) is looking to acquire iron ore mines in Karnataka, Jharkhand and Chhatisgarh. It is also eyeing coal mines in West Bengal, the reports added. Separately, the reports suggested that NMDC will increase output by 10% in the year starting April to meet rising demand from steelmakers.

NMDC’s net profit rose 59.7% to Rs 968.22 crore on 53.5% growth in net sales to Rs 1623.60 in Q3 December 2007 over Q3 December 2006.

National Mineral Development Corporation primarily mines iron ore. However, it also dabbles in diamonds and limestone.