The National Mineral Development Corporation Limited (NMDC) is a mining organisation and mineral producer owned by the Government of India.
The market capitalisation of NMDC Limited, as of mid-June 2018, is a little over Rs.36,000 crore.
Company’s Wealth and Recent Performance
- For the fourth quarter of the financial year 2017-18, NMDC Limited reported its revenue from operations to be at Rs.3,883.01 crore. This is a very significant increase (more than 15%) in comparison to the figures reported in the December quarter and the March quarter of the previous year.
- The corresponding profit after tax for the fourth quarter was stated to be Rs.1,105.85 crore. In comparison to the profit for the March quarter of the previous year, this is a two-fold increase.
- For the year ended March 31, 2018, the standalone revenue from operations was disclosed to be at Rs.11,614.91 crore, in a stark contrast to the Rs.8,829.64 crore reported in the previous year. The respective profit for the year was revealed to be Rs.3,802.79 crore. This marks an increase of more than 30% in profit over the same period last year.
- At the same time, the company’s total expenses also increased for the year to Rs.6,105.86 crore from Rs.5,452.24 crore. The total assets of NMDC Limited for the year ended were stated to be worth Rs.28,691.32 crore.
National Mineral Development Corporation Stock Trends in 2018
- On January 2, 2018, the share price of NMDC Limited was Rs.141.50 on the National Stock Exchange. Over the course of the week, the price rose steadily to cross Rs.150 and reach its 52-week high of Rs.162.70. After reaching this level, the price went on a downward trajectory and lost around 10% by the end of the month. The closing price on January 31, 2018 was Rs.140.
- The prices dropped further in February and March owing to turbulence in the international markets. The country’s benchmark stock market indices - BSE SENSEX and NIFTY 50, also shed points in the same period. The share price of NMDC Limited at the start of February was Rs.140 and by the end of the month, it was at levels around Rs.130. The shares continued to exhibit their bearish behaviour in March and moved on to drop roughly 10% more. On March 28, the closing price of the scrip was Rs.118.55.
- The prices recovered slightly in the month of April but the gains made in this month were marginal. It wasn’t an impressive performance by the NMDC Limited shares, although they did manage to retain their heading. The scrip ended the month at Rs.125.
- The month of May turned out to be a disappointing one for the investors. Instead of continuing on the upward path, the prices went down once again. The shares of National Mineral Development Corporation were traded in the Rs.110 region for the entire month of May. In comparison to April, the scrip, in this month, lost roughly 5% to close at Rs.117.45. Since the start of the year, the NMDC Limited scrip has fallen by roughly 30%.
National Mineral Development Corporation Stock Trends in 2016 and 2017
- In the first week of 2016 January, the share price of National Mineral Development Corporation Limited was trading at levels above Rs.90. The share price went down over the course of the month by 10% to enter the Rs.80 region. The prices recovered slightly in February, although the month was highly volatile for the investors. An interim dividend of 950% was announced in the period as well. In March, the scrip commenced a bull run which took the price well above the Rs.95 mark.
- This bullish behaviour was sustained by the NMDC Limited shares for the most of April 2016. The prices went beyond the Rs.100 mark and the shares were traded at those levels up until last April, when the share price dipped once again. This marked the start of a bearish run and it continued well into May. On May 31, 2016, the closing price of the scrip was Rs.88.25 on the NSE.
- Starting in June, the share price of National Mineral Development Corporation went on an upward path again. This time, the bull run lasted for the entire year with the stocks making significant gains. In June, the shares remained steadily above the Rs.90 mark. In July, the prices rose steadily to cross Rs.100 once again. The month of August was quite rewarding for the investors as the shares traded hands at levels varying from Rs.100 - Rs.110.
- In the first half of September, the prices dipped slightly but they maintained their bearings above the Rs.100 mark. This dip was followed by a sharp spike in the prices which was seen throughout October. The NMDC share price rose by more than 30% in this period with the closing price on October 31, 2016 being Rs.132.95.
- Things changed post demonetisation as the markets in the country lost heavily. However, the NMDC Limited scrip was one of the few stocks that did not incur serious losses. The stock price went down by a little over 10% to enter the Rs.110 region in late November. The prices recovered slightly in December to end the year at Rs.123.
- 2017 began on a terrific note for the investors. The markets were eager to recuperate their previous losses and investors sentiments were high. The National Mineral Development share price, at the start of January, was Rs.129.50. The same scrip by the end of the month had ascended to levels above Rs.145. In February, the share price dropped slightly but it managed to remain above the Rs.140 mark.
- The first week of March marked the beginning of a bear run which continued till July. An interim dividend of 415% was announced in mid-March but that didn’t do much to keep the investors motivated. The price continued to fall and by early April, the shares were trading hands at levels Rs.120 - Rs.130. The fall continued through the entire month of May with the price on May 31, 2017 being Rs.110.65. By the end of June, the price had descended into the Rs.100 region.
- Things changed for the better in July when the prices started going up again. The NMDC Limited share price by the end of the month had ascended to cross the Rs.120 mark again and recover its previous losses. The shares attempted to stabilise at this level in August as the price cautiously remained above Rs.120.
- The share price of National Mineral Development Corporation went up dramatically in September driven by developments in the company. In a little over a week, the scrip gained 10% and went up to be traded at levels around Rs.132. However, the scrip shed these gains just as quickly as it made them, in the same month. By late September, the shares were once again back in the Rs.110 region.
- In the final quarter of the year, that is October to December, the NMDC shares made some decent gains. The prices didn’t tumble dramatically in this period and the scrip continued to make up for its previous losses. The closing price at the end of the year was Rs.137.80 on the National Stock Exchange.
Should you invest in National Mineral Development Corporation?
- The NMDC Limited, in its financials for the year 2017-18, has reported excellent numbers. Its profit and revenue from operations have improved by roughly 30% over the year. This boost in profit came in after the issues on the transportation front, particularly railway, were resolved in December. As a result, sales are expected to return to their previous levels in the coming quarters.
- Furthermore, the company has increased the prices of lump iron ores. Therefore, the boost in sales, favourable macro trends, and the increased prices are expected to support NMDC report’s healthy numbers. The company’s future prospects are also improving with the organisation investing heavily in its upcoming steel plant in Nagarnar. This plant is expected to boost the capacity of the company by 3 metric tonnes per annum.
- Considering the performance of the stock itself, the scrip has delivered returns of more than 40% since the start of 2016. However, as of June 2018, the shares are on a bear run, which makes it an ideal time to purchase them. In comparison to its peers like Coal India and Vedanta, NMDC Limited is ranked at the third place in terms of profit.
- If you are looking to invest in NMDC shares for a long time, then it is certainly a feasible prospect. Many analysts are bullish on this scrip. However, it is strongly recommended that you do your own research before investing. You can also look into mutual funds houses with holdings in this particular stock.
The National Mineral Development Corporation Limited is a Government of India owned enterprise. It is under the administrative control of the Ministry of Steel. The company is primarily involved in the exploration and extraction of iron from iron ores in the regions of Bellary, Bacheli, and Kirandul. It is also actively involved in the exploration of minerals such as copper, rock phosphate, diamond, tungsten, graphite, et cetera. It is the country’s largest iron ore producer with a capacity of up to 30 million tonnes. In 2008, the company was categorised as a Navratna Public Sector Enterprise owing to its excellent performance over the years.
History of the Company
The National Mineral Development Corporation was incorporated in the year 1958 under the Companies Act. The company became a deemed public listed company in the year 1975 and it wasn’t until 1993 that the company was completely converted into a public company. The company commenced the mining and production from the iron ore deposits at Bailadila in the 1960s. Over the years, it moved into the exploration of other minerals.
Management of the Company
- Mr. Baijendra Kumar - Chairman and Managing Director
- Mr. C.E Kindo - Executive Director
- Mr. K. Vidyasagar - Chief Vigilance Officer
National Mineral Development Corporation Limited Listings in NSE, BSE, and Indices
The shares of NMDC Limited are available for trading on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited. The codes for the same have been mentioned below:
- NSE Code - NMDC
- BSE Code - 526371
- ISIN - INE584A01023
- Sector - Mining and Minerals
Coming to the stock market indices, the National Mineral Development Corporation does not comprise the BSE SENSEX and NIFTY 50. However, it does form the following indices:
- NIFTY 100
- NIFTY 500
- NIFTY 200
- NIFTY Metal
- NIFTY Next 50
- S&P BSE AllCap
- S&P BSE Basic Materials
- S&P BSE Metal
- S&P BSE SENSEX Next 50
Hyderabad - 500-028
Contact number: 040-23538713/14/15/16
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