NMDC - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.1

Let’s delve into NMDC Ltd.—India’s flagship iron ore miner—with solid fundamentals, attractive valuations, and long-standing strategic relevance.

🔍 Core Financials Overview

Profitability

ROCE: 29.6% and ROE: 23.6% are outstanding—high efficiency in converting capital into profits.

EPS: ₹7.44 — healthy and well-aligned with low market price.

PAT Trend

PAT dipped slightly from ₹1,880 Cr. to ₹1,477 Cr., yet only 3.43% down—suggests stability in margins despite commodity pressures.

Balance Sheet

Debt-to-equity: 0.14 — virtually debt-free; excellent for cyclical industries.

Dividend

Yield: 3.37% — very attractive for income seekers and indicative of shareholder-friendly management.

📊 Valuation Indicators

Metric Value Insight

P/E Ratio 9.67 Undervalued, well below industry PE of 18.8

P/B Ratio ~2.12 Reasonable, considering asset-heavy nature

PEG Ratio -0.84 Negative — caution on forward growth trajectory

Intrinsic Value Likely higher Strong earnings + balance sheet make a re-rating plausible

Verdict: Offers exceptional value; downside appears limited barring major commodity shocks.

⛏️ Business Model & Strategic Edge

Leading iron ore producer with vertically integrated operations, expanding into steel production via NMDC Steel.

Strong moat from government allocation, mining licenses, and supply chain infrastructure.

High-margin production supported by low-cost reserves and strategic geographic coverage.

Vulnerabilities: subject to global iron prices, export duty regulations, and environmental policy shifts.

📉 Technical Signals

RSI: 57.5 — leaning bullish; strong but not overbought.

MACD: 0.69 — mild positive momentum.

Price is just above 50-DMA & 200-DMA, indicating supportive zones around ₹69.7–₹70.

Strong volume base, though tapering—suggests possible near-term consolidation.

🎯 Entry Zone & Long-Term Holding View

Recommended Entry Range: ₹68–₹72 — just above 200-DMA support.

Holding Thesis

Excellent play for value + yield, low volatility, and core materials exposure.

Hold for 2–3 years, especially if steel business integration and export dynamics play in favor.

Keep watch on ore pricing trends, global demand, and domestic policy cues.

Want me to compare NMDC to SAIL, Tata Steel, or JSW for deeper clarity on sector leadership and risk-reward balance? Let’s sharpen your pick.

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