NMDC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | NMDC | Market Cap | 79,452 Cr. | Current Price | 90.4 ₹ | High / Low | 92.8 ₹ |
| Stock P/E | 11.5 | Book Value | 36.8 ₹ | Dividend Yield | 3.65 % | ROCE | 30.3 % |
| ROE | 24.4 % | Face Value | 1.00 ₹ | DMA 50 | 83.7 ₹ | DMA 200 | 78.5 ₹ |
| Chg in FII Hold | 0.12 % | Chg in DII Hold | -0.30 % | PAT Qtr | 1,738 Cr. | PAT Prev Qtr | 1,695 Cr. |
| RSI | 65.2 | MACD | 2.77 | Volume | 2,50,90,141 | Avg Vol 1Wk | 3,06,86,817 |
| Low price | 61.6 ₹ | High price | 92.8 ₹ | PEG Ratio | -1.06 | Debt to equity | 0.11 |
| 52w Index | 92.3 % | Qtr Profit Var | -10.6 % | EPS | 7.85 ₹ | Industry PE | 19.7 |
📊 Financials: NMDC demonstrates strong fundamentals with ROE at 24.4% and ROCE at 30.3%, supported by a low debt-to-equity ratio of 0.11. EPS stands at ₹7.85, and quarterly PAT remained stable (₹1,738 Cr vs ₹1,695 Cr), though profit variation (-10.6%) highlights some volatility. Dividend yield of 3.65% provides steady income support.
💹 Valuation: The stock trades at a P/E of 11.5, well below the industry average of 19.7, indicating undervaluation. PEG ratio of -1.06 reflects growth concerns but also highlights potential mispricing. Book value of ₹36.8 provides strong intrinsic backing. Overall, valuation appears attractive compared to peers.
🏭 Business Model: NMDC operates as India’s largest iron ore producer, with strengths in resource ownership and scale. Its competitive advantage lies in low-cost production and government backing. However, earnings are sensitive to commodity price cycles and global demand fluctuations.
📈 Entry Zone: Attractive entry would be near ₹85–₹87, aligning with support levels and undervaluation. Current price (₹90.4) is above both 50 DMA (₹83.7) and 200 DMA (₹78.5), suggesting strong momentum. Long-term investors may accumulate gradually, with focus on commodity cycle sustainability.
Positive
- Strong ROE (24.4%) and ROCE (30.3%).
- Low debt-to-equity ratio (0.11).
- Dividend yield of 3.65% provides steady returns.
- Stable PAT performance despite volatility.
Limitation
- Quarterly profit variation (-10.6%) highlights volatility.
- PEG ratio (-1.06) reflects growth concerns.
- DII holdings declined (-0.30%), showing reduced domestic support.
Company Negative News
- Profit volatility with weak quarterly growth.
- Decline in DII holdings (-0.30%).
Company Positive News
- FII holdings increased (+0.12%), showing foreign investor confidence.
- Strong fundamentals with attractive valuation (P/E 11.5 vs industry 19.7).
- Government backing and resource ownership strengthen long-term prospects.
Industry
- Iron ore and mining sector remains cyclical and commodity-driven.
- Industry P/E at 19.7 highlights NMDC’s undervaluation.
- Global demand and price cycles impact profitability.
Conclusion
⚖️ NMDC demonstrates strong fundamentals with high efficiency, low debt, and attractive valuation. Entry is favorable near ₹85–₹87 for long-term investors. Current levels suggest strong momentum, making cautious accumulation viable. Holding is recommended for dividend stability and long-term growth, with monitoring of commodity price cycles.