NMDC Steel Q1 FY27 Results (NSE: NSLNISP)
Signal: Margin pressure
The read
The key inflection is not a volume-led margin recovery: revenue grew 8.82% YoY, but operating EBITDA declined 1.99% and EBITDA margin compressed 121bps to 10.91%. The 97.70% PAT growth was largely aided by the inventory movement switching from a ₹102.38 crore expense to a ₹121.36 crore benefit, while QoQ PAT fell 87.11% from ₹391.91 crore, making the bottom-line improvement less durable than the headline suggests.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹3,661.84 Cr | +8.82% | -5.59% |
| EBIT | ₹157.44 Cr | +5.09% | |
| Net profit | ₹50.51 Cr | +97.70% | |
| EPS | ₹0.19 | +111.11% | |
| EBIT margin | 10.91% |
P&L walk
Revenue increased 8.82% YoY but operating EBITDA declined 1.99% and EBITDA margin fell 121bps to 10.91%; PAT rose 97.70% because the inventory movement shifted from a ₹102.38 crore expense to a ₹121.36 crore benefit, alongside lower depreciation and finance cost.
Key positives
- Revenue from operations increased 8.82% YoY to ₹3,661.84 crore despite operating EBITDA declining 1.99%, showing positive top-line momentum from the year-ago base.
- PAT increased 97.70% YoY to ₹50.51 crore, supported by the inventory movement improving by ₹223.74 crore year over year and depreciation declining 6.10%.
- Debt service metrics remained disclosed without a default: interest service coverage was 1.59x and the company stated there was no repayment or interest default as of 30 June 2026.
- Term-loan pricing was reduced to 8.40% effective 12 January 2026 from the previously reset 12.45% rate, which should moderate borrowing-cost pressure if sustained.
Key concerns
- Operating EBITDA declined 1.99% YoY to ₹399.56 crore and EBITDA margin fell 121bps to 10.91%, despite revenue growth of 8.82%.
- Raw material cost increased to 68.53% of revenue from 66.78% YoY, contributing to gross-margin compression from 36.17% to 34.78%.
- Borrowings rose 9.87% QoQ to ₹5,056.15 crore, while finance cost increased 31.07% QoQ to ₹126.38 crore and interest service coverage fell to 1.59x from 6.04x sequentially.
- Sequential earnings momentum weakened materially: revenue fell 5.59%, operating EBITDA fell 50.41% and PAT fell 87.11% from Q4FY26.
- The YoY PAT increase depends materially on a ₹223.74 crore favorable swing in inventory movement, which may not repeat.
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