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Q.

NMDC posts a whooping profit if over Rs 1500 crores for the quarter ending June 2010. -----news. What is the reason for this success story of this state run company? Your views?

Asked by Good Citizen, 03 Aug '10 12:17 pm
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Answers (2)

 
1.

The success story is a low revenue to expenditure ratio if you look at their balance sheets. For a revenue of Rs. 2518 crores generated in the last quarter from mining of iron from its various facilities, the operational expenditure involved is only 491 crores including employee's cost. There is NIL interest payment outflow. The capital emplyed on equipment is low, the reason for the low Depreciation of 24 crores in the books (where as for big companies with huge capital deployment on infrastructure or equipment, it could run to 100s of crores).

It has generated an operational profit of 2249 crores. With NIL interest, the only major outgo in by way of Corporate tax to the tune of 745 crores, thus leaving it a Net Profit of 1504 crores.

NMDC caters to the domestic market and sells most of its iron ore to the Indian makers. Last year, exports constituted 15% of its revenues and were mainly to Korea and Japan.

Also, NMDC owns a diamond mine at Panna in Madhya Pradesh, which is th ...more
Answered by Omega, 03 Aug '10 01:07 pm

 
  
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2.

Market forces,,, higher realisation of iron ore price
Answered by dhanendra kumar jain, 03 Aug '10 12:21 pm

 
  
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