NMDC Steel Ltd (NSLNISP) Q1 FY27 Results Analysis: Margin Contracts 120 bps, Debt Service Constraints Persist

NMDC Steel Ltd's Q1 FY27 numbers came in soft, with revenue of Rs. 3,661.84 Cr (+8.81% YoY) and PAT growth of +97.61% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Revenue grew 8.81% YoY but was more than offset by a 774 bps surge in material costs, causing EBITDA margin to contract 120 bps to 10.91%. PAT more than doubled from a low base but was inflated by other income, while a DSCR of 0.17x highlights severe debt service constraints. The quarter underscores input-cost vulnerability and weak operating cash generation, with no management guidance provided for future quarters.

Key Investment Insights

Key Positives

• Revenue from operations grew 8.81% YoY to Rs.3,661.84 Cr
• PAT more than doubled YoY to Rs.50.51 Cr (low base assisted by inventory swing)
• Net worth increased Rs.88.15 Cr QoQ to Rs.13,228 Cr
• Borrowings reduced 11.45% YoY to Rs.5,056 Cr
• Interest service coverage ratio improved YoY from 1.27x to 1.59x

Risk Factors

• EBITDA margin compressed 120 bps YoY to 10.91% due to input cost surge
• Material cost as a percentage of revenue deteriorated 774 bps YoY to 68.53%
• DSCR at 0.17x indicates insufficient operating cash for debt service
• Other income of Rs.42.89 Cr accounted for 85% of PAT, inflating reported profitability
• PAT collapsed 87% QoQ from Rs.391.91 Cr in Q4 FY26
• EBITDA declined 1.99% YoY despite revenue growth