NMDC shares surged 140% in 10 months; should you invest in the metal stock now?
NMDC with a 'buy' rating, establishing a target price of ₹297 per share. Despite the company's shares already surging by 140% in just 10 months, this new target price suggests another 20% increase from the stock's previous closing price of ₹248 per share. Additionally, reaching this target would mark a 14-year high for the stock, with the last similar milestone achieved back in April 2010.
The company is the country's largest producer of iron ore. Operating under the Ministry of Steel, NMDC is a ‘Navratna’ public sector enterprise and owns and operates highly mechanised iron ore mines in Chhattisgarh and Karnataka. Other than iron ore, NMDC also produces diamonds from its Majhgawan mine at Panna, Madhya Pradesh.
It currently produces around 45 MT of iron ore per annum and has a capacity of producing 51 MT. Also Read: OPEC cuts and geopolitical tensions propel Brent crude up by over 13% in 2024 The brokerage outlined several key factors in its report for its bullish outlook on NMDC. Firstly, it pointed out that the company is well-positioned to benefit from the growing demand for steel in India.
Secondly, it anticipates the company to capitalise on a potential resurgence in capital expenditure, resembling the period of 2003–2007. Thirdly, it says, the company is undertaking aggressive mine capacity expansion to meet future demand. Lastly, it highlighted the company's abundant access to high-quality ores for the next four decades.
Read more on livemint.com
