The shift comes at a time when global iron ore prices remain subdued and the company is looking for more predictable and market-aligned pricing. “What we are trying to do is move to formula-based pricing, which we started last time. A couple more instances of this new formula are being tried out. If that stabilises, I think it will be a game changer,” Amitava Mukherjee, CMD of NMDC and NMDC Steel, told CNBC-TV18.
Despite pricing pressures, NMDC expects to hold EBITDA margins steady at 42% in FY26, supported by higher volumes. “Price pressure will obviously be there throughout the year, but we are counting on the volumes to manage the margins,” Mukherjee said. In FY25, the company reported EBITDA margins of 42%, but Q4 margins came in lower at 29.28%.
Addressing Street concerns on receivables, which currently stand at ₹6,500-7,000 crore, Mukherjee said both Vizag-based RINL and the newly operational NMDC Steel have turned the corner in recent months. “RINL has started making cash profits… NMDC Steel, which we also manage, has also turned around in the last three months,” he said, adding that receivables should be “very reasonable” by the end of the fiscal.
On the pricing outlook in the near term, Mukherjee remained non-committal. “We take into account a lot of factors in this formula, and whether it will result in a price cut is difficult to predict right now,” he said, noting that pricing decisions for the coming period are due in the next few days.
Meanwhile, NMDC is working on expanding its environmental clearance (EC) capacity. The company currently operates with an EC limit of around 53 million tonnes, with an additional 2 million tonnes expected shortly. Over the next year to 18 months, the company hopes to ramp this up to 82 million tonnes, combining approvals from Bailadila and Karnataka.
For FY26, NMDC has set a volume target of 55 million tonnes, aiming to utilise its EC capacity fully. “We are targeting to do 100% of our EC,” Mukherjee said.
Watch the accompanying video for the entire conversation.
