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NMDC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | NMDC | Market Cap | 70,721 Cr. | Current Price | 80.4 ₹ | High / Low | 86.8 ₹ |
| Stock P/E | 9.96 | Book Value | 36.8 ₹ | Dividend Yield | 4.11 % | ROCE | 30.3 % |
| ROE | 24.4 % | Face Value | 1.00 ₹ | DMA 50 | 79.5 ₹ | DMA 200 | 75.0 ₹ |
| Chg in FII Hold | 0.44 % | Chg in DII Hold | -0.32 % | PAT Qtr | 1,695 Cr. | PAT Prev Qtr | 1,969 Cr. |
| RSI | 49.6 | MACD | 0.25 | Volume | 3,59,35,390 | Avg Vol 1Wk | 4,47,77,728 |
| Low price | 59.5 ₹ | High price | 86.8 ₹ | PEG Ratio | -0.92 | Debt to equity | 0.11 |
| 52w Index | 76.4 % | Qtr Profit Var | 33.5 % | EPS | 8.08 ₹ | Industry PE | 20.2 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT declined from 1,969 Cr. to 1,695 Cr., showing short-term pressure. EPS at 8.08 ₹ reflects decent earnings capacity.
- Margins: ROCE at 30.3% and ROE at 24.4% highlight strong efficiency and profitability.
- Debt: Debt-to-equity ratio of 0.11 indicates very low leverage, strengthening financial stability.
- Cash Flow: Dividend yield of 4.11% provides attractive shareholder returns, supported by strong cash generation.
💹 Valuation Indicators
- P/E Ratio: 9.96 vs Industry PE of 20.2 → Undervalued compared to peers.
- P/B Ratio: Current Price (80.4 ₹) / Book Value (36.8 ₹) ≈ 2.18 → Reasonable valuation.
- PEG Ratio: -0.92 → Negative, suggesting weak growth prospects relative to price.
- Intrinsic Value: Current price appears below fair value, offering upside potential.
🏭 Business Model & Competitive Advantage
- NMDC is India’s largest iron ore producer, benefiting from strong domestic demand and government backing.
- Low debt and high return ratios provide resilience against cyclical downturns.
- Strong dividend yield enhances investor appeal.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 70 ₹ – 75 ₹, closer to DMA 200 support levels.
- Long-Term Holding: Strong fundamentals and undervaluation make NMDC suitable for long-term investors, though cyclical risks in commodity prices warrant staggered buying.
✅ Positive
- Low debt-to-equity ratio (0.11) ensures financial resilience.
- High ROCE (30.3%) and ROE (24.4%) highlight efficiency.
- P/E ratio significantly below industry average, indicating undervaluation.
- Dividend yield of 4.11% provides attractive income.
- FII holding increased by 0.44%, showing foreign investor confidence.
⚠️ Limitation
- Quarterly PAT decline from 1,969 Cr. to 1,695 Cr. shows earnings weakness.
- PEG ratio negative, signaling poor growth prospects.
- DII holding decreased by 0.32%, reflecting reduced domestic institutional support.
📉 Company Negative News
- Quarterly PAT fell sequentially, indicating short-term pressure.
- DII holding decreased by 0.32%, showing reduced domestic institutional confidence.
📈 Company Positive News
- Dividend yield of 4.11% supports shareholder value.
- FII inflows (+0.44%) highlight foreign investor interest.
- Strong ROCE and ROE metrics reinforce operational efficiency.
🌐 Industry
- Mining and metals sector benefits from infrastructure growth and steel demand in India.
- Industry PE at 20.2 suggests NMDC trades at a discount, offering potential upside if earnings stabilize.
🔎 Conclusion
NMDC demonstrates strong fundamentals with low debt, high return ratios, and attractive dividend yield. Despite short-term profit weakness and limited growth prospects, the stock remains undervalued compared to peers. Investors may consider entering around 70–75 ₹ for long-term holding, with staggered buying to manage commodity cycle risks.
I can also outline technical support and resistance zones using RSI, MACD, and DMA data to complement this fundamental analysis if you'd like.