Should you buy, sell, or hold NMDC shares after declining volume, price reduction?

Current Stock Market: Following reports of price reductions and a drop in June volumes, the multibagger NMDC share price fell 3% on Tuesday. Is it better to hold, sell, or purchase the stock?

Tuesday saw a 3% decrease in the price of Multibagger NMDC shares during a day that saw further pressure on the indexes. The company’s announcement of reduced June volumes and the downward revision in iron-ore pricing for its output also served as impetus for the adjustment. Even while the nation’s overall trend for steel demand is still healthy, these point to short-term problems for earnings growth. Analysts who are keeping an eye on near-term volumes and realisations anticipate strong volume growth for NMDC.

The price of NMDC shares has increased by almost 125% in the past year, providing investors with multibagger returns thanks to increased output and somewhat better realizations.

Near term challenges

June was somewhat a month of some pinch in production as well as sales volumes for NMDC. Thus, the production realized by NMDC in June 2024 would be a total of 3. 37 million tonne (MT), and this consumption was slightly lower than the 3. 48 MT that was realized in the same month of the previous year. Just in the same manner, the overall various sales were consistently on a decline year over year from 4. 10 MT to 3. 73 MT.

In addition, NMDC has lowered the price it lists for iron ore. The price of iron ore lumps has been reduced from Rs 6,450 per tonne to Rs 5,950 per tonne. This represents a Rs 500 reduction in price. There is a Rs 500 price decrease.

Global prices are also declining in parallel with the drop in iron costs. Global iron ore prices saw a significant increase in January, rising to above $140 per tonne ; however, they have since corrected to less than $110 per tonne.

solid long-term prospects

Analysts do, however, have a solid longer-term view. Low per capita steel consumption, according to ICICI Securities analysts, offers NMDC a large window of opportunity for expansion. Another encouraging factor is NMDC’s aggressive volume ambitions, which are intended to fulfil the increasing demand for iron ore. Additionally, experts claim that NMDC is expanding the range of goods it offers by branching out into non-iron ore mining industries in both India and abroad, including bauxite, gold, diamond, lithium, and copper.