7X Multibagger Stocks India · Value Pick · NMDC · Aug15

NMDC Ltd

Value Pick : Summary

About Business :

The NMDC (National Mineral Development Corporation) is a state-controlled mineral producer of the Government of India. NMDC is owned by the Government of India and is under administrative control of the Ministry of Steel.

NMDC is India’s largest Iron Ore producer and exporter producing about 30 million tons of iron ore from 3 fully mechanised mines in Chhattisgarh and Karnataka. NMDC also operates the only mechanised diamond mine in the country at Panna in Madhya Pradesh.

SWOT Analysis :

Strengths

  • NMDC operates in monopoly with total control on mineral pricing as it is a Navratna company of India.
  • NMDC having mining licenses in India is a very big deal as it is extremely tough to get clearances for such businesses giving it a Moat.
  • It might be also controlling iron ore importing policies. Making domestic producer to buy from Indian Mining company only.

weaknesses

  • Bieng a sarkari company higher chances of corruption leading to extremely slow implementation of expansion planes & increasing overheads.
  • Setting up a steel plant using cash surplus which given the conditions right now doesn't seems to be highly profitable.

opportunities

  • NMDC will grab more mining licences in future with granted clearances.
  • Very high quality of Iron ore better than Fe65 is being mined by NMDC.

threats

  • Fluctuating international iron ore prices has giving hard time to NMDC maintaining profitability going forward.
  • Need to increase turnover consistently to beat lowering Iron ore prices internationally.

Business Verdict :

It is quite confusing to interpret current situation if you look at stock price of NMDC but looking at quality of business of NMDC makes it an awesome Value Pick.

With prices of Iron Ore falling to multi-year lows NMDC is available undervalued which is like opportunity of the decade to be invested in such a Monopolistic business.

Official Website

Quality Analysis
Value Matrix


What are Value Picks ?

Value picks are stocks of companies that are believed to be undervalued at NSE or BSE. It is an outcome of huge sattebaaji directed by Stock brokers in that stock making Markets overreact to good and bad news, resulting in stock price movements that do not correspond with the company's long-term business or fundamentals.

You can learn Value Pick Multibagger Stock course & start your own research in depth. After completing the Value Pick Multibagger Stock course You have to apply methods & circle of competence on your researched Value Picks.

Is Value Pick Tax Free ?

YES, Profit arising from holding Equity shares for 1 Year or more is covered under Long Term Capital Gain ( LTCG) as per Income Tax Act 1961 ( Section 54 )

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regards,

jasmeet singh

Founder & Investor

SEBI Regd.(INH100004951)

Jasmeet Singh

About me :

Currently managing assets of 5 Crore+ & still sleep like a baby every night because Valueguyz makes life simpler.

I am passionate about 3 things in my life Financial System, Fitness & Photography

I got introduced to Financial system through Forex Trading back in 2007 during my 3rd Year of Engineering & It was too complex yet magnificent. Officially I entered Indian Stock Market in early 2008 at the very beginning of Global Financial Crisis, but what the hell did I know for me it was the last semester & time to get serious about my passion ie, Counter Strike

Legends :

RoCE : Return on Capital Employed (Effective)

PAT(Avg.) : Net Profit after tax ( Average )

CMP : Current Market Price

MoS : Margin of Safety

DISCLAIMER

I am currently a registered Research Analyst with SEBI (INH100004951). My writings n research here at www.valueguyz.com are in accordance with SECURITIES AND EXCHANGE BOARD OF INDIA (RESEARCH ANALYSTS) REGULATIONS, 2014.