NMDC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | NMDC | Market Cap | 77,385 Cr. | Current Price | 88.0 ₹ | High / Low | 94.2 ₹ |
| Stock P/E | 11.2 | Book Value | 36.8 ₹ | Dividend Yield | 3.76 % | ROCE | 30.3 % |
| ROE | 24.4 % | Face Value | 1.00 ₹ | DMA 50 | 86.2 ₹ | DMA 200 | 80.0 ₹ |
| Chg in FII Hold | 0.12 % | Chg in DII Hold | -0.30 % | PAT Qtr | 1,738 Cr. | PAT Prev Qtr | 1,695 Cr. |
| RSI | 49.2 | MACD | 0.89 | Volume | 1,57,87,984 | Avg Vol 1Wk | 1,56,63,323 |
| Low price | 66.8 ₹ | High price | 94.2 ₹ | PEG Ratio | -1.04 | Debt to equity | 0.11 |
| 52w Index | 77.1 % | Qtr Profit Var | -10.6 % | EPS | 7.85 ₹ | Industry PE | 20.0 |
📊 Financials: The company demonstrates strong profitability with ROE at 24.4% and ROCE at 30.3%, reflecting efficient capital usage. Debt-to-equity is low at 0.11, showing a healthy balance sheet. Quarterly PAT rose slightly from ₹1,695 Cr. to ₹1,738 Cr., though profit variation of -10.6% indicates some inconsistency. EPS of ₹7.85 supports steady cash flow generation.
💹 Valuation: Current P/E of 11.2 is well below the industry average of 20.0, suggesting undervaluation. The PEG ratio of -1.04 indicates weak growth prospects relative to price. Book value of ₹36.8 against a market price of ₹88.0 implies a fair P/B ratio. Intrinsic value appears supportive of current levels, making the stock attractive for accumulation.
🏭 Business Model: The company operates in mining and iron ore production, benefiting from strong domestic demand and government support. Competitive advantage lies in scale, cost efficiency, and resource ownership, though earnings are cyclical and tied to commodity prices.
📈 Entry Zone: A favorable entry would be closer to ₹80–85, near the 200 DMA of ₹80. Current price of ₹88.0 is slightly above fair value, so accumulation on dips is recommended.
⏳ Long-Term Holding: Strong fundamentals, low debt, and undervaluation relative to peers support long-term holding. Investors can accumulate steadily, with potential for solid returns as demand for iron ore remains resilient.
Positive
- ✅ Strong ROE (24.4%) and ROCE (30.3%)
- ✅ Low debt-to-equity ratio (0.11)
- ✅ Dividend yield of 3.76% adds shareholder value
- ✅ P/E (11.2) below industry average, suggesting undervaluation
Limitation
- ⚠️ Profit variation (-10.6%) indicates inconsistency
- ⚠️ PEG ratio of -1.04 suggests weak growth prospects
- ⚠️ EPS of ₹7.85 is modest relative to market capitalization
Company Negative News
- 📉 Decline in DII holding (-0.30%) shows reduced domestic institutional confidence
Company Positive News
- 📈 Increase in FII holding (+0.12%) reflects foreign investor interest
- 📈 PAT growth from ₹1,695 Cr. to ₹1,738 Cr. shows operational resilience
Industry
- ⛏️ Mining sector benefits from strong domestic and export demand
- 📊 Industry P/E at 20.0 suggests peers are valued higher
- 🌍 Growth opportunities in steel production and infrastructure projects
Conclusion
Overall, the company is financially strong with excellent return ratios, low debt, and undervaluation compared to peers. Despite modest EPS and profit variation, fundamentals remain solid. Best strategy is cautious accumulation near ₹80–85 for long-term holding, with potential for strong returns as iron ore demand continues to grow.
Would you like me to extend this with a peer comparison against other mining and steel companies, or a technical analysis view to highlight support/resistance and momentum indicators?