How has been the historical performance of NMDC Steel?

Revenue Growth and Operating Performance

NMDC Steel reported a substantial increase in net sales from ₹3,048.99 crores in March 2024 to ₹8,503.05 crores in March 2025, signalling a strong top-line expansion. However, this surge in revenue has not translated into profitability. The company’s operating profit before depreciation and interest (PBDIT) remained negative, with losses widening from ₹1,317.63 crores in March 2024 to ₹1,716.74 crores in March 2025. The operating profit margin, excluding other income, improved slightly but stayed deeply negative at -21.03% in the latest fiscal year, compared to -47.12% the previous year.

Raw material costs, a significant expense for the steel sector, escalated sharply to ₹7,256.45 crores in March 2025 from ₹3,841.95 crores a year earlier, reflecting the increased scale of operations but also exerting pressure on margins. Other expenses also more than doubled, reaching ₹2,659.34 crores, further impacting the cost structure.

Profitability and Earnings

The company’s net losses deepened, with profit after tax (PAT) declining from a loss of ₹1,560.32 crores in March 2024 to ₹2,373.78 crores in March 2025. Earnings per share (EPS) correspondingly worsened from -₹5.32 to -₹8.10 over the same period. The PAT margin remained negative at -27.92% in the latest fiscal year, indicating that despite higher sales, the company is yet to achieve operational breakeven or profitability.

Interest expenses nearly doubled to ₹651.94 crores, reflecting increased borrowings and financial costs. Depreciation also rose significantly to ₹953.04 crores, consistent with the company’s expanding asset base.

Balance Sheet and Financial Position

NMDC Steel’s total liabilities stood at ₹26,871.74 crores in March 2025, down slightly from ₹28,718.26 crores the previous year. Long-term borrowings decreased from ₹4,261.01 crores to ₹3,289.31 crores, while short-term borrowings increased modestly to ₹2,608.33 crores. The company’s shareholder funds declined from ₹15,488.26 crores to ₹13,114.48 crores, reflecting accumulated losses and reserve erosion.

On the asset side, net block values remained stable at around ₹20,088 crores, while capital work in progress reduced sharply from ₹1,214.89 crores to ₹717.19 crores, indicating a slowdown or completion of certain projects. Inventories increased to ₹3,056.83 crores, which may suggest stockpiling or slower movement of finished goods.

Cash Flow Trends

Cash flow from operating activities showed a marked improvement, turning positive at ₹1,965 crores in March 2025 from a negative ₹2,825 crores in the prior year. This improvement was driven by a significant increase in working capital changes, which contributed ₹3,750 crores in the latest year. However, cash flow from investing activities remained negative at ₹505 crores, reflecting ongoing capital expenditure. Financing activities saw a net outflow of ₹1,459 crores, indicating debt repayments or reduced capital raising.

Summary of Historical Performance

In summary, NMDC Steel has experienced a rapid expansion in sales over the last two years but has struggled to convert this growth into profitability. The company’s losses have widened, driven by rising raw material costs, other expenses, and higher interest charges. Its balance sheet shows a high level of debt and declining shareholder equity, while cash flow from operations has recently improved but remains under pressure from investing and financing outflows.

Investors should weigh these financial challenges against the company’s growth prospects and sector dynamics when considering NMDC Steel’s stock. The historical data underscores the need for operational efficiencies and cost control to achieve sustainable profitability in the competitive steel industry.

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