📌 At a Glance
NMDC is the OG PSU cash cow — mining iron, minting profits, and throwing 3.5%+ dividend yield like confetti. With a dirt-cheap P/E of 9, solid ROE, and net profit of ₹6,500+ Cr, it’s quietly compounding while others chase capex unicorns. But is this miner a value gem or just low-P/E bait?
1️⃣ Business Model – Dig, Ship, Repeat
NMDC (National Mineral Development Corporation) is India’s largest iron ore producer, fully owned by the Government of India, operating under the Ministry of Steel.
Its core businesses:
- Iron Ore Mining:
Contributes ~95% of revenue. Produces ~45–50 MT/year. Supplies to domestic steel giants like SAIL, JSW, Tata Steel. - Other Minerals:
Diamonds (Panna mine), limestone, magnesite. Basically side gigs with minimal revenue. - Sponge Iron & Wind Energy:
Why? Nobody knows. But it exists.
2️⃣ Financials – PSU but Profitable AF
| Metric | FY25 | YoY Change |
|---|---|---|
| Revenue | ₹23,906 Cr | +12% |
| Net Profit | ₹6,531 Cr | +17% |
| EBITDA Margin | 34% | Flat |
| ROE | 24% | High |
| Dividend Payout | 44% | Consistent |
| Debt | ₹4,276 Cr | Manageable |
🧮 EPS: ₹7.44
💸 Dividend: ₹2.66/share (3.56% yield)
3️⃣ Valuation – Boring Price, Beautiful Math
- Price: ₹67.9
- P/E: 9.15 → Dirt cheap
- P/B: 2x
- Yield: 3.56%
- ROCE: 30%
🧠 Fair Value Range (EduEstimate): ₹80–100
Assumes sustainable PAT of ₹6,000–6,500 Cr and 12–15x multiple (very fair for a near-monopoly with iron ore pricing power).
This thing prints cash and pays it out — no nonsense.
4️⃣ Capex & Expansion – Doubling Down
- Target: 100 MT mining capacity in coming years
- FY25 Capex: ₹3,700 Cr
- CWIP: ₹4,700 Cr
- New Mines: Ongoing work in Chhattisgarh, Karnataka, Jharkhand
Unlike other PSUs that just hoard cash and file tenders, NMDC is actually putting money to work.
5️⃣ Risks – Commodities Never Sleep
- 📉 Iron Ore Prices: Volatile AF. One China slowdown and your topline caves.
- 💰 Receivables Rising: Debtor days at 118 → concerning trend.
- 🏗️ Steel Cycle Dependency: When steel suffers, NMDC sneezes.
- 🧾 PSU Drag: Bureaucratic delays, forced dividend payouts, and zero pricing freedom.
Still, at P/E 9, you’re not exactly paying for perfection.
6️⃣ Stock Performance – Underrated PSU King
- 3Y Return: +34%
- 5Y Return: +26% CAGR
- 1Y Return: -25% (entry point?)
- Public Holding: 12.35%
- FIIs: Increased to 11.7% (up from 6% in FY22)
Retail sleeping. FIIs accumulating. Coincidence?
7️⃣ Final Thoughts – NMDC: Miner. Dividend Machine. Low-Key Beast.
NMDC is that rare PSU that does what it says — dig ore, sell ore, pay dividend. It doesn’t try to be a tech stock, doesn’t make confusing acquisitions, and doesn’t scream for attention. It just quietly delivers ₹6,000+ Cr in annual profit.
If you’re a long-term investor who loves cash, hates hype, and can handle some China volatility, NMDC is a quiet giant.
And at this price? It’s giving value stock energy in a momentum stock world.
✍️ Written by Prashant | 📅 20 June 2025
✅ Tags
NMDC, NMDC share price, iron ore stocks, PSU dividend stocks, NMDC analysis, NMDC FY25 results, metal PSU stocks, undervalued PSU, high dividend PSU, mining stocks India, NMDC stock review, NMDC capex plan, NMDC earnings, iron ore production India, NMDC fair value, steel cycle stocks, government-owned companies India, commodity PSU stocks, long-term value stocks
