NMDC Steel Ltd (NSLNISP) Q2 FY27 Results Analysis: OPM Expands 631 bps, PAT Swings to Profit
NMDC Steel Ltd's Q2 FY27 numbers came in strong. Here's a quick read of what worked, what to watch, and what management said.
| Results date | November 12, 2026 |
|---|---|
| Revenue (Q2) | Rs. 3,764.37 Cr (+11.05% YoY) |
| PAT (Q2) | Rs. 61.03 Cr |
| EBITDA margin | 13.05% (+631 bps YoY) |
| EPS (Q2) | Rs. 0.21 |
Quarter Snapshot
Q2 FY27 revenue grew 11.05% YoY to Rs.3,764.37 Cr with OPM expanding 631 bps YoY to 13.05%, above the FY26 reference level of 11.76%, and PAT of Rs.61.03 Cr marks a third consecutive profitable quarter against a year-ago loss. Deleveraging resumed with borrowings down Rs.461.71 Cr YoY and D/E at 0.36. Key watch items are the coking-coal/FX cost build (materials at 69.25% of revenue), a Rs.613.47 Cr H1 inventory build that cut CFO to 0.62x of interest paid, and PAT quality reliant on other income and deferred-tax absorption.
Q2 FY27 Expectations vs Results
| Driver | What happened | Verdict |
|---|---|---|
| "Revenue reads ahead of the Q1 FY27 run-rate … on realization, in-line to ahead YoY" | Rs.3,764.37 Cr: +2.80% QoQ, +11.05% YoY | Played out |
| "Margins … direction likely flat to compressing at the operating line"; OPM to hold near 11.76% or compress | OPM 13.05%, up QoQ (12.08%) and YoY (6.74%) — margin expanded | Contradicted |
| "Coal-led cost squeeze" through Q2 close | Materials 69.25% of revenue (+72 bps QoQ, +984 bps YoY) — but realization outran it | Played out on the cost line |
| Iron-ore pricing "a modest cost tailwind" | No input-price disclosure in the filing | Not observable |
| Rising-borrowings / working-capital-deterioration risk from Rs.5,056.15 Cr | Borrowings Rs.4,836.92 (−Rs.219.23 QoQ); current ratio 0.56 — improved | Contradicted |
| ECL consistency / Rs.9.60 Cr land-provision recognition | Filing silent — carried forward to the call | Not observable |
| HRC output vs 2.9 MT capacity; lime/logistics updates | No KPI in filing — carried forward | Not observable |
| Independent-Director appointments; disinvestment progress | Filing silent — carried forward | Not observable |
Read our full results preview.
Management Guidance vs Delivery
| What management said | Where | What happened | Verdict |
|---|---|---|---|
| "Turning the corner financially" / EBITDA-positive as the milestone (FY26 Annual Report, CMD's message) | FY26 Annual Report | Q2 FY27 OPM 13.05%, third consecutive profitable quarter, PBT Rs.102.72 Cr | Confirmed |
| Prior notes' watch: whether FY26 OPM 11.76% "is sustained or improve" | prior-quarter analyst notes | OPM 13.05% in Q2, 12.57% H1 | Confirmed |
| Rating upgrade to Crisil A/Stable (Rs.4,500 Cr facilities, Aug 2026) consistent with credit trajectory | announcement cited in prior-quarter analyst notes | Borrowings −Rs.461.71 Cr YoY, D/E 0.36, no default; but DSCR 0.19 and CFO 0.62× of interest paid — credit direction supportive, coverage still thin | Partially |
Key Investment Insights
Key Positives
- Revenue grew 11.05% YoY to Rs.3,764.37 Cr (+2.80% QoQ), a second straight quarterly increase
- OPM expanded 631 bps YoY to 13.05%, above the FY26 full-year level of 11.76%
- PAT of Rs.61.03 Cr vs a loss of Rs.114.78 Cr in Q2 FY26; third consecutive profitable quarter
- Borrowings fell Rs.461.71 Cr YoY to Rs.4,836.92 Cr; D/E improved to 0.36 from 0.41
- Other expenses fell 5.21% QoQ and were roughly flat YoY at 21.23% of revenue
- Receivables fell Rs.253.24 Cr YoY; no default on loans/debt securities per the filing
Risk Factors
- Cost of materials consumed rose 29.43% YoY, absorbing 69.25% of revenue vs 59.41% a year ago (+984 bps)
- H1 CFO of Rs.162.04 Cr is only 0.62x of the Rs.260.37 Cr finance cost paid, after a Rs.613.47 Cr inventory build
- Inventories rose Rs.1,582.26 Cr YoY to Rs.4,510.85 Cr, tying up working capital
- Other income of Rs.28.51 Cr equals ~47% of Q2 PAT, indicating thin earnings quality at the PAT line
- Effective tax rate of 40.59% is entirely deferred; DTA recoverability depends on sustained profitability
- GST show-cause notices of Rs.111.19 Cr remain outstanding, with Rs.56.40 Cr in abeyance before the High Court, Bilaspur
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Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.