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GMDCLTD - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | GMDCLTD | Market Cap | 18,360 Cr. | Current Price | 578 ₹ | High / Low | 651 ₹ |
| Stock P/E | 27.9 | Book Value | 210 ₹ | Dividend Yield | 1.75 % | ROCE | 14.2 % |
| ROE | 11.0 % | Face Value | 2.00 ₹ | DMA 50 | 556 ₹ | DMA 200 | 489 ₹ |
| Chg in FII Hold | -1.02 % | Chg in DII Hold | 0.10 % | PAT Qtr | 120 Cr. | PAT Prev Qtr | 164 Cr. |
| RSI | 53.8 | MACD | 3.58 | Volume | 1,04,53,499 | Avg Vol 1Wk | 81,12,073 |
| Low price | 226 ₹ | High price | 651 ₹ | PEG Ratio | 1.82 | Debt to equity | 0.04 |
| 52w Index | 82.6 % | Qtr Profit Var | -6.91 % | EPS | 31.7 ₹ | Industry PE | 20.2 |
📊 Core Financials
- Revenue & Profit Growth: Quarterly PAT declined from 164 Cr. to 120 Cr., showing short-term weakness, though overall profitability remains stable.
- Margins: ROE at 11.0% and ROCE at 14.2% reflect moderate profitability compared to industry peers.
- Debt Ratios: Debt-to-equity at 0.04 indicates a virtually debt-free balance sheet.
- Cash Flows: Stable operating cash flows supported by mining operations.
- Return Metrics: EPS at 31.7 ₹ highlights consistent earnings generation.
💹 Valuation Indicators
- P/E Ratio: 27.9, above industry PE of 20.2, suggesting mild overvaluation.
- P/B Ratio: ~2.75 (Current Price / Book Value), reasonable for mining sector.
- PEG Ratio: 1.82, fair valuation considering growth prospects.
- Intrinsic Value: Current price (578 ₹) is slightly above fair value; upside potential depends on sustained demand for minerals.
🏢 Business Model & Competitive Advantage
- Operates in mining with focus on lignite, bauxite, and other minerals.
- Competitive advantage lies in resource ownership, government backing, and established market presence.
- Resilient business model with exposure to cyclical demand in energy and industrial sectors.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 540 ₹ – 560 ₹ (near DMA 50 and support levels).
- Long-Term Holding: Suitable for long-term investors seeking exposure to mining and energy, though cyclical risks should be monitored.
Positive
- Debt-light balance sheet with debt-to-equity at 0.04.
- Dividend yield of 1.75% provides income support.
- Strong institutional support with rising DII inflows (+0.10%).
- EPS of 31.7 ₹ indicates steady earnings.
Limitation
- P/E ratio above industry average, indicating mild overvaluation.
- Quarterly PAT decline (-6.91%) shows short-term weakness.
- Profitability metrics (ROE, ROCE) are moderate compared to peers.
Company Negative News
- Reduction in FII holdings (-1.02%) shows cautious foreign investor sentiment.
- Quarterly PAT decline from 164 Cr. to 120 Cr. reflects operational pressure.
Company Positive News
- Strong 52-week performance with 82.6% index gain.
- Rising DII inflows (+0.10%) support investor confidence.
Industry
- Mining sector benefits from rising demand in energy and industrial applications.
- Industry PE at 20.2 reflects fair valuations and moderate optimism.
Conclusion
- GMDC is a fundamentally stable mining company with low debt, steady earnings, and dividend support.
- Valuation is slightly premium, but long-term prospects remain positive given resource demand.
- Best suited for long-term investors seeking exposure to mining, with entry near support levels for better risk-reward.
I can also prepare a comparison with peers like Coal India or NALCO to highlight GMDC’s relative positioning in the mining and energy sector.