NMDC share price drops 17% in last 1 year but experts remain bullish on this PSU stock. Here’s why

NMDC share price has witnessed remarkable volatility in the last few months. Shares of India’s largest and state-owned iron ore producer have been under pressure, mirroring weak market sentiment.

 However, experts seem to have turned positive about the stock at the current juncture as they note the iron ore player is poised for solid growth in the next few years.

Falling for the second consecutive session, NMDC share price declined almost 2 per cent in intraday trade on the BSE on Tuesday, February 25.

NMDC share price trend

This PSU stock has been under pressure after hitting a 52-week high of ₹95.35 on May 21 last year. It touched its 52-week low of ₹59.70 on January 13 this year.

Over the last year, the mineral stock has declined about 17 per cent. It has witnessed notable volatility lately as, on the monthly scale, it has been swinging between gains and losses since September last year.

Should you buy NMDC stock?

The recent fall in the stock has brought down its valuation. As the growth prospects of the company and the overall iron ore industry is bright, experts are positive about NMDC stock.

NMDC on February 6 reported a 29 per cent year-on-year growth in its consolidated net profit for Q3FY25 to ₹1,896.66 crore compared to ₹1,469.73 crore reported during the same quarter last year.

Revenue from operations rose 21.40 per cent year-on-year to ₹6,567.83 crore in the quarter under review from ₹5,409.90 crore in the corresponding quarter of the last financial year.

India is the fourth largest producer of iron ore globally. Brokerage firm Dolat Capital Market highlighted that as per National Steel Policy 2017, the crude steel production target for India stands at 255 MT for FY30, with crude steel capacity reaching 300 mtpa. This translates to an iron ore demand of roughly 437 mtpa, as per the NITI Aayog, highlighting the significant growth potential for iron ore industry in India.

NMDC share price target

Dolat Capital Market has a buy call on the stock with a target price of ₹90, valuing it at 6 times FY27E EV/EBITDA. This implies a 36 per cent upside potential in the stock from its February 24 close of ₹66.03 on the BSE.

Initiating coverage on the stock, Dolat Capital underscored that NMDC is the largest iron ore producer in India and the sixth largest globally. It is on track to increase its production capacity to 67 mtpa by FY26E and 100 mtpa by FY30E. Moreover, the company’s management has guided production volume of 48 MT/53-54 MT for FY25/26E.

“We believe NMDC is well-positioned for growth as the increase in EC (environmental clearance) capacity combined with commissioning of capex projects supporting higher dispatch will support top-line growth, while greater external sales of pellets will enhance margins,” Dolat Capital said.

“Strong operational capacity, strategic capex plan of ₹700 billion for volume expansion and net cash position are key positives. We expect revenue, EBITDA and PAT CAGR of 27 per cent, 9 per cent and 8 per cent, respectively, over FY25-27E. The stock is currently trading at EV/EBITDA of 5 times and 4.6 times on FY26 and FY7E earnings, respectively,” said Dolat Capital.

While the stock appears to be a long-term buy, technical indicators suggest it is also bet-worthy in the short term.

According to Mandar Bhojane, an equity research analyst at Choice Broking, NMDC continues to consolidate within the ₹68– ₹59 range, indicating a neutral market sentiment.

Bhojane observed that the Relative Strength Index (RSI) at 51.10 suggests a lack of strong momentum, reinforcing the ongoing sideways movement.

The stock is above the 20-day exponential moving average (EMA), which is immediate support.

“A decisive close above the 50-day and 200-day EMAs would indicate bullish strength and the potential for an upward trend, while a breakdown below ₹63 could lead to further downside toward the next support at ₹58,” said Bhojane.

Bhojane believes a long position at ₹65.61 can be considered in NMDC stock, targeting ₹71– ₹82, provided it sustains above key resistance levels.

“A breakout above ₹68 with strong volume would confirm a bullish reversal, creating a favourable buying opportunity. If the stock fails to hold ₹63, it may trigger a decline toward ₹58, which could serve as a potential accumulation zone. To limit downside risks, setting a stop-loss at ₹62 would be a prudent strategy,” said Bhojane.

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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.