Are NMDC Steel latest results good or bad?

The latest financial results for NMDC Steel reveal a complex operational landscape. In Q2 FY26, the company reported a net loss of ₹114.78 crore, a significant shift from a profit of ₹25.56 crore in the previous quarter (Q1 FY26). This transition highlights ongoing challenges in achieving profitability, despite a notable year-on-year revenue growth of 122.68%, which brought total revenues to ₹3,389.90 crore. The quarter also saw a slight sequential revenue increase of 0.73% from ₹3,365.22 crore in Q1 FY26, indicating some stabilization in sales levels.
However, the operational metrics reflect considerable volatility. The operating profit halved from ₹407.66 crore in Q1 FY26 to ₹207.27 crore in Q2 FY26, leading to a decline in operating margins from 12.11% to 6.11%. This margin compression, alongside high fixed costs related to depreciation and interest, has contributed to the company's inability to maintain profitability. The interest costs, while slightly reduced year-on-year, remain substantial relative to operating profits, further complicating the financial outlook.

On a half-yearly basis, NMDC Steel reported combined revenues of ₹6,755.12 crore with a net loss of ₹89.22 crore for H1 FY26, marking an improvement from the previous year’s figures but still indicating challenges in sustaining profitability. The company's operational efficiency and cost structure are under scrutiny as it seeks to scale up its integrated steel plant operations.

The evaluation of NMDC Steel has undergone an adjustment, reflecting the ongoing operational challenges and the financial performance observed in this reporting period. The company continues to navigate a competitive landscape in the ferrous metals sector, where it faces pressure to improve its profitability metrics while managing high operational costs.