NMDC - Investment Analysis

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

Investment Rating: 4.5

⛏️ Fundamental Analysis: NMDC Ltd.

NMDC, India’s largest iron ore producer, offers a compelling mix of deep value, strong profitability, and healthy dividends. Its low valuation and high capital efficiency make it a solid candidate for long-term investment, especially for those seeking exposure to commodities and cyclical plays.

Metric Value Implication

Stock P/E 9.67 Deeply undervalued vs. industry PE of 18.8 — strong value signal

PEG Ratio -0.84 Negative — due to flat or declining growth, needs monitoring

ROE / ROCE 23.6% / 29.6% Excellent — top-tier capital efficiency

Dividend Yield 3.37% High — attractive for income-seeking investors

Debt-to-Equity 0.14 Very low — strong balance sheet

EPS ₹7.44 Solid — supports valuation and dividend payouts

Profit Growth (QoQ) +3.43% Stable — not aggressive, but consistent

📉 Technical & Trend Analysis

Current Price: ₹71.8

DMA 50 / DMA 200: ₹69.8 / ₹69.7 — trading above both, bullish trend

RSI: 57.5 — mildly bullish, room to run

MACD: +0.69 — positive momentum

Volume: Below average — accumulation phase likely

✅ Is It a Good Long-Term Investment?

Yes — very strong candidate. NMDC combines value, yield, and efficiency. While growth is not explosive (reflected in the negative PEG), its consistent profitability and low valuation make it ideal for long-term holding, especially in commodity upcycles.

🎯 Ideal Entry Price Zone

Buy Zone: ₹68–₹72

Near DMA support and current consolidation range

Accumulate gradually if ROE stays above 20% and dividend yield >3%

Avoid chasing above ₹78 unless volume and earnings momentum pick up

🧭 Exit Strategy / Holding Period (If Already Holding)

If you're already invested

Holding Period: 3–5 years — to benefit from commodity cycles and dividend compounding

Exit Strategy

Partial Exit near ₹82–₹85 if valuation stretches (P/E > 15)

Hold if ROCE remains >25% and dividend payout continues

Reassess if EPS declines or global iron ore prices weaken significantly

Would you like a comparison with other metal and mining stocks like Coal India, Hindustan Zinc, or Vedanta to explore broader resource-sector opportunities?

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