NMDC - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.5

📊 Core Financials Overview

Profitability

PAT held steady at ₹1,969 Cr vs ₹1,496 Cr — a solid performance with minimal quarterly variation.

EPS: ₹7.59 — strong for its price range.

Return Metrics

ROCE: 30.3% and ROE: 24.4% — both excellent, indicating efficient capital deployment and shareholder value creation.

Debt Profile

Debt-to-equity: 0.14 — low leverage, enhancing financial flexibility.

Cash Flow: Consistently strong, supported by high-margin iron ore operations and minimal debt.

💹 Valuation Indicators

Metric Value Commentary

P/E Ratio 10.1 Deeply undervalued vs. industry average of 21.4 — attractive entry point.

P/B Ratio ~2.28 Reasonable given high ROE.

PEG Ratio –0.93 Negative due to cyclical earnings — valuation may be conservative.

Intrinsic Value ~₹82.6 (base case)

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Current price of ₹76.7 is ~7% below intrinsic value — mildly undervalued.

🧠 Business Model & Competitive Advantage

NMDC Ltd. (National Mineral Development Corporation) is India’s largest iron ore producer and a Navratna PSU

Core Operations

Operates four mechanized iron ore mines in Karnataka and Chhattisgarh.

Also runs India’s only mechanized diamond mine in Madhya Pradesh

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Diversification

Engaged in exploration of copper, rock phosphate, limestone, magnesite, tungsten, and beach sands.

Global Standing

10th largest iron ore producer globally.

Known for low-cost, highly mechanized mining — a key competitive edge

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Strategic Vision

Aims to become a global, environmentally responsible mining and steel company

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Focused on expanding both domestically and internationally.

Its competitive advantage lies in scale, cost leadership, and resource diversity, making it a resilient player in the cyclical commodities space.

📈 Technical & Sentiment Signals

RSI: 66.8 — approaching overbought zone, short-term caution.

MACD: Positive — bullish momentum.

Volume: Slightly below average — suggests mild consolidation.

DMA 50/200: Price above both — confirms long-term uptrend.

🎯 Entry Zone & Long-Term Guidance

Suggested Entry Zone: ₹70–₹74 — near DMA levels and below RSI peak.

Long-Term View: NMDC is a fundamentally strong PSU with low debt, high returns, and a generous dividend yield of 4.30%. Ideal for long-term holding, especially for investors seeking exposure to India’s infrastructure and steel demand cycles.

You can explore NMDC’s fundamental analysis or its intrinsic valuation breakdown for deeper insights. Let me know if you'd like a comparison with Coal India or SAIL.

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www.alphaspread.com

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tradebrains.in

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www.dnpindia.in

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