HDFC Securities has maintained 'Sell' on NMDC with target price of Rs 154 as against current market price (CMP) of Rs 173 in its report.

Commenting on the investment rationale the stock broker said, "NMDC made solid gains in 1QFY15 (EBITDA: Rs 24 billion, +26.1% YoY, -2.7% QoQ, est. Rs 21 billion). Volume growth remained robust (8.6 mT, +18.3% YoY). Realizations were flattish (2.6% YoY, -1.9% QoQ) as lump prices were cut by Rs 200/t in May, revised upwards by Rs 300/t in June and global fines prices plummeted 17% (in USD terms) in 1QFY15.

Iron ore prices continue to remain under pressure globally and Indian imports have jumped due to comparable cost-effectiveness (Lump prices now USD 103/t CFR China). NMDC has maintained its prices in August, but there may be downward revisions if low demand persists, especially for lumps. This forms the core of our bearish stance on the stock. In addition to the domestic pricing situation, Essar pipeline has been a key contributor to the surge in volumes. The pipeline was disrupted late July and is currently non-operational."

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