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Epic Research
NMDC (Buy)
CMP: ₹122.95
Target: ₹150
NMDC is engaged in mining of iron ore. The company’s segments include iron ore and other minerals & services. It is also engaged in the production and sale of diamond, sponge iron and wind power.
NMDC is currently trading at 15.35x of last twelve month EPS. Company is a great ‘Buy’ at current Levels. Stock is a debt free company and has history of dividend yield of 5-6.
The quarterly numbers have shown strength and we believe going forward NMDC will benefit most from domestic demand.
Stock is currently trading at 15.35x of LTM Earnings per share and 9x of FY19 and FY20 Estimates. On EV/EBITDA Basis NMDC is available at 5x of projected estimates for FY19 and FY20.
We recommend a buy at current levels and suggest adding on dips to ₹110 levels. Stock has value target of ₹150 levels giving an upside of 24 per cent. We believe stock will outperform its peers considering the scale of operations and valuations of the company.
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