💰 Financial Performance

Revenue Growth by Segment

Operating income grew by 178.88% YoY, increasing from INR 3,049 crore in FY2024 to INR 8,503 crore in FY2025, driven by the first full year of operations following the August 2023 commissioning.

Geographic Revenue Split

Primarily domestic-focused; while specific regional percentages are not disclosed, the company relies on the Indian domestic market, which saw improved realizations post-March 2025 due to the implementation of safeguard duties on cheaper imports.

Profitability Margins

Net Profit Margin stood at -27.92% in FY2025, an improvement from -49.2% in FY2024. The company reported a Loss After Tax of INR 2,373.78 crore in FY2025 compared to a loss of INR 1,560.32 crore in FY2024 due to high initial ramp-up costs.

EBITDA Margin

Operating profit is projected to reach ~INR 1,340 crore in FY2026, a significant turnaround from an operating loss of INR 1,788 crore in FY2025. H1 FY2026 EBITDA is expected between INR 700-750 crore compared to a negative INR 1,335 crore in H1 FY2025.

Capital Expenditure

The total project cost for the Nagarnar Iron & Steel Plant was approximately INR 24,000 to INR 25,000 crore, with ~71% funded through equity infusion from NMDC Limited and the remainder via external debt.

Credit Rating & Borrowing

Crisil maintains a 'BBB+/Watch Developing' rating. The company has a total debt of ~INR 5,000 crore with a debt servicing obligation of INR 1,652 crore (principal + interest) scheduled for FY2026.

⚙️ Operational Drivers

Raw Materials

Iron Ore represents 15-20% of the total cost of production; Coking Coal is the other primary raw material, with the company maintaining a 1-month warehouse inventory and 1-month in-transit inventory.

Import Sources

Iron ore is sourced domestically from Chhattisgarh (NMDC mines); Coking coal is imported, though specific countries are not named, it is managed through port-based warehouses and sea transit.

Key Suppliers

NMDC Limited is the primary supplier for iron ore under a nine-year long-term contract executed on an arm's length basis with flexible credit terms.

Capacity Expansion

Current installed capacity is 3.0 Million Tonnes Per Annum (MTPA) at the Nagarnar Iron & Steel Plant (NISP). No immediate further expansion is detailed as the focus remains on stabilizing the current 3 MTPA greenfield facility.

Raw Material Costs

Raw material costs are mitigated by a long-term contract with NMDC. Iron ore costs are 15-20% of production; payments to NMDC are made on an ad-hoc basis based on NSL's performance, providing a liquidity cushion.

Manufacturing Efficiency

Capacity utilization improved significantly to 82% in Q1 FY2026 from 50% in FY2025. The company achieved neutral EBITDA for the first time in March 2025 as operations stabilized.

Logistics & Distribution

Not disclosed as a specific percentage of revenue, but the company utilizes port-based warehouses for coal and relies on rail/road for domestic steel distribution.

📈 Strategic Growth

Expected Growth Rate

64%

Growth Strategy

Growth will be achieved by ramping up capacity utilization from 50% to over 80%, optimizing production costs to achieve a projected INR 1,340 crore operating profit in FY2026, and benefiting from the GoI safeguard duties which align domestic realizations with market prices.

Products & Services

Hot Rolled Coils (HRC), Flat Steel products, Semis, and Pig Iron. In FY2025, approximately 23% of output was sold as lower-margin semis and pig iron due to technical constraints at finished steel lines.

Brand Portfolio

NMDC Steel Limited (NSL), Nagarnar Iron & Steel Plant (NISP).

New Products/Services

Focus is on increasing the proportion of high-value finished steel products over semis/pig iron to improve blended realizations; specific new product revenue % not disclosed.

Market Expansion

The company is focusing on stabilizing operations in the domestic Indian market post-demerger from NMDC; target regions include domestic infrastructure and construction hubs.

Market Share & Ranking

Not disclosed; the company is a new entrant with a 3 MTPA capacity in the competitive Indian steel sector.

Strategic Alliances

Maintains a critical operational and administrative support alliance with NMDC Limited, mandated by the Ministry of Steel until the divestment process is finalized.

🌍 External Factors

Industry Trends

The steel industry is inherently cyclical with high earnings volatility. The current trend shows a recovery in domestic prices post-March 2025 and a shift toward higher capacity utilization among domestic players to offset high fixed costs.

Competitive Landscape

Competes with large domestic steel producers and international importers; market dynamics are currently influenced by government protectionist duties and domestic infrastructure demand.

Competitive Moat

Moat is derived from raw material security via the 9-year NMDC iron ore contract and status as a CPSU, providing access to flexible credit and government support; sustainability depends on successful divestment and operational ramp-up.

Macro Economic Sensitivity

Highly sensitive to domestic investor sentiment and GDP growth; a slowdown in infrastructure spending directly impacts demand for flat steel products.

Consumer Behavior

Demand is driven by end-user industries like automobiles and construction; shifts toward sustainable infrastructure are expected to influence long-term product mix.

Geopolitical Risks

Trade barriers and safeguard duties (SGD) act as a protective measure against global price volatility and cheaper imports from surplus-producing nations.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to Ministry of Steel mandates, pollution norms, and safeguard duties (SGD) implemented in March 2025 to curb cheaper imports.

Environmental Compliance

Not disclosed in absolute INR; however, the company follows statutory requirements and has implemented resettlement and rehabilitation for 750 land losers.

Taxation Policy Impact

The company reported a tax credit/benefit of INR 947.94 crore in FY2025. It holds an Input Tax Credit (ITC) for capex of INR 1,475 crore, providing a liquidity release of ~INR 600 crore per annum via GST set-offs.

Legal Contingencies

The Vigilance Department resolved 49 grievances in FY2025; specific case values for pending litigation in High/Supreme courts are not disclosed in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the timeline and outcome of the GoI divestment (50.79% stake), which could significantly alter the company's support structure and strategic direction.

Geographic Concentration Risk

High concentration in India, specifically the Nagarnar region for production; revenue is tied to the health of the Indian domestic steel market.

Third Party Dependencies

Critical dependency on NMDC Limited for iron ore (15-20% of costs) and operational handholding; any change in NMDC's support philosophy is a key rating sensitivity.

Technology Obsolescence Risk

Risk of technical issues at finished steel lines which previously limited output to 23% semis/pig iron; digital transformation includes adopting electronic procurement and preventive check systems.

Credit & Counterparty Risk

Faces potential loss if counterparties default on receivables; mitigated by a robust capital base and monitoring of return on capital (operating activities / total equity).