BENGALURU (Reuters) – India’s National Mineral Development Corp (NMDC) on Friday reported a rise in quarterly profit, aided by robust iron ore sales.
The company posted a profit of 16.50 billion rupees for the first quarter ended June 30, up 12% from a year ago.
Increased economic activity and higher infrastructure spending in India have boosted steel and cement consumption ahead of state-level and national elections due next year, analysts said.
NMDC’s revenue from operations rose 13.2%, to 53.95 billion rupees, while raw material costs fell 82.6% due to lower coal and coke prices.
Demand and prices for iron ore rose globally this year as production dropped 10% from January to May in China, forcing the world’s largest consumer to import more iron ore, driving up prices worldwide.
Meanwhile, robust domestic demand for steel, which requires iron ore for its production, also helped boost sales of the mineral.
Last month, state-owned NMDC said it sold a total of 11.15 million tonnes of iron ore in the quarter, its highest ever.
Steel manufacturers such as Jindal Stainless and JSW Steel reported handsome profits last month on the back of domestic demand.
Shares of NMDC settled flat ahead of the results. The stock fell 6.2% during the April-June quarter.
(Reporting by Biplob Kumar Das in Bengaluru; Editing by Pooja Desai)