138% Returns in 1 Year: LKP Securities eyes 21% upside on multibagger PSU stock at TP of ₹301; Should you buy?
- NMDC shares have gained nearly 20 per cent on a year-to-date (YTD) basis and domestic brokerages see an upside of 21 per cent on the stock in the near-term
NMDC Share Price Today: Shares of public-sector undertaking (PSU) NMDC gained around nine per cent on Wednesday, June 11, continuing its upward momentum since the release of its January-march quarter results for fiscal 2023-24 (Q4FY24). The PSU stock has given multi-bagger returns to investors over the last one-to-three-year periods.
NMDC reported the highest-ever Iron ore production and sales number during in Q4FY24. Revenues grew 11 per cent YoY led by better realizations during the quarter. Domestic brokerage LKP Securities has given a 'buy' rating on the iron ore mining company and sees a potential upside of 21 per cent at a target price of ₹301.
LKP Securities bullish on NMDC; TP set at ₹301
NMDC is well-positioned to leverage strong volume growth in the domestic steel markets over the coming year. The mining business is anticipated to achieve a compound annual growth rate of approximately nine per cent from FY24 to FY26E.
The state-owned miner's management anticipates producing ~50 million tonnes (mt) of iron ore by FY25 and ~54 mt by FY26. NMDC is targeting a production of 100 mt by 2030-31.
‘’At CMP, the stock is trading at 6.8x/5.3x EV of FY25E/FY26E EBITDA. We maintain our ‘buy’ rating with a revised TP of ₹301 (earlier ₹297) valuing at 6.7x EV/EBITDA of FY26E,'' said LKP Securities.
NMDC is under the administrative control of the Ministry of Steel and is India's largest iron ore mining company, contributing to around 20 per cent of the country's demand for the key steel-making raw material.
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NMDC Share Price Trend
On Tuesday, shares of NMDC opened at ₹255 and gained around 9.61 per cent to hit an intra day high of ₹286.35 before settling 0.22 per cent higher at ₹255.15 apiece on the BSE. The mining PSU commands a market capitalisation (mcap) of ₹74,774.41 crore, according to BSE data.
According to Trendlyne data, NMDC has given better returns compared to Nifty 50 and Sensex in the last one year. In the past six months, the PSU gave 39.03 per cent returns, against 10.95 per cent and 9.5 per cent returns by Nifty 50 and Sensex, respectively.
In the last one year, NMDC has given multibagger 137.33 per cent returns to investors as against 25.33 per cent and 22.09 per cent returns by Nifty 50 and Sensex, respectively. On Tuesday, domestic equity benchmarks Sensex and Nifty 50 ended flat on profit booking in the absence of fresh triggers.
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
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