NMDC Ltd is Rated Strong Buy

Current Rating and Its Significance

On 03 February 2026, NMDC Ltd’s rating was revised to Strong Buy from Buy, reflecting an improvement in its overall Mojo Score from 77 to 82. This rating indicates a robust confidence in the stock’s potential for superior returns relative to the broader market and its sector peers. For investors, a Strong Buy rating suggests that the stock is expected to outperform due to a combination of strong fundamentals, attractive valuation, positive financial trends, and favourable technical indicators.

Here’s How NMDC Ltd Looks Today

As of 05 February 2026, NMDC Ltd continues to demonstrate strong performance across multiple parameters. The company operates in the Minerals & Mining sector and is classified as a midcap stock. Its current Mojo Grade of Strong Buy is supported by an overall Mojo Score of 82.0, signalling a compelling investment opportunity based on comprehensive analysis.

Quality Assessment

The quality grade for NMDC Ltd is rated as excellent. This is underpinned by the company’s strong long-term fundamental strength, highlighted by an average Return on Equity (ROE) of 25.81%. Such a high ROE indicates efficient utilisation of shareholder capital to generate profits. Additionally, the company has maintained a low average Debt to Equity ratio of zero, reflecting a conservative capital structure with minimal reliance on debt financing. This financial prudence reduces risk and enhances stability, which is a key consideration for investors seeking quality stocks.

Moreover, NMDC Ltd has exhibited healthy growth in net sales, with an annual growth rate of 18.82%. This consistent expansion in revenue demonstrates the company’s ability to scale operations and capture market opportunities effectively.

Valuation Perspective

Currently, NMDC Ltd’s valuation is considered fair. The stock trades at a Price to Book (P/B) ratio of 2.3, which is a premium compared to its peers’ historical averages. While this premium suggests that the market values NMDC’s growth prospects and quality, it also implies that investors are paying a moderate premium for these attributes.

The company’s ROE of 21.6% combined with a Price to Earnings to Growth (PEG) ratio of 1.8 indicates that earnings growth is reasonably priced relative to the stock’s valuation. Over the past year, NMDC Ltd has delivered a total return of 28.70%, outperforming many peers and broader indices. Its profits have increased by 6.3% during the same period, supporting the sustainability of its valuation.

Additionally, the stock offers a high dividend yield of 3.8%, providing investors with a steady income stream alongside capital appreciation potential. This dividend yield is attractive in the current market environment, especially for income-focused investors.

Financial Trend and Recent Performance

The financial grade for NMDC Ltd is positive, reflecting favourable trends in recent quarters. The company reported its highest quarterly net sales of ₹7,610.79 crores in December 2025, signalling strong operational momentum. This robust sales performance supports the company’s growth narrative and underpins its earnings potential going forward.

Institutional investors hold a significant 27.54% stake in NMDC Ltd, which is a positive indicator. Institutional ownership often reflects thorough fundamental analysis and confidence in the company’s prospects, providing additional validation for retail investors.

Technical Outlook

From a technical perspective, NMDC Ltd is rated bullish. The stock has demonstrated resilience and strength in price action, with a 3-month return of +12.88% and a 6-month return of +16.57%. Year-to-date, the stock has gained 0.83%, and over the last year, it has delivered a strong 28.70% return. Despite a minor 1-day decline of 2.44% and a 1-week dip of 0.99%, the overall trend remains positive, indicating sustained investor interest and momentum.

The stock’s performance has consistently outpaced the BSE500 index over the last three years, one year, and three months, highlighting its market-beating credentials. This technical strength complements the fundamental and valuation factors, reinforcing the Strong Buy rating.

What This Rating Means for Investors

For investors considering NMDC Ltd, the Strong Buy rating signals a compelling opportunity to participate in a stock with solid fundamentals, reasonable valuation, positive financial trends, and strong technical momentum. The excellent quality metrics, including high ROE and zero debt, suggest a financially sound company capable of sustaining growth and weathering market volatility.

The fair valuation indicates that while the stock is priced at a premium, this is justified by its growth prospects and dividend yield. Investors should view this as a balanced risk-reward scenario, where the potential for capital appreciation is supported by steady income and strong operational performance.

Moreover, the positive financial trends and bullish technical outlook provide additional confidence that the stock is well-positioned to continue its upward trajectory. Institutional backing further reinforces the credibility of this investment thesis.

In summary, NMDC Ltd’s current Strong Buy rating by MarketsMOJO reflects a comprehensive assessment of its quality, valuation, financial health, and market momentum. Investors seeking exposure to the Minerals & Mining sector with a midcap stock exhibiting robust growth and stability may find NMDC Ltd an attractive addition to their portfolio.

Risks and Considerations

While the outlook is positive, investors should remain mindful of sector-specific risks such as commodity price fluctuations, regulatory changes, and global economic conditions that can impact mining companies. Additionally, the premium valuation requires monitoring to ensure that growth expectations continue to be met.

Regular review of quarterly results and market conditions is advisable to stay aligned with the stock’s evolving fundamentals and technical signals.

Conclusion

NMDC Ltd’s Strong Buy rating as of 03 February 2026, supported by current data from 05 February 2026, highlights the stock’s attractive investment profile. With excellent quality metrics, fair valuation, positive financial trends, and bullish technicals, the company stands out as a promising candidate for investors aiming to capitalise on growth opportunities in the Minerals & Mining sector.

Careful consideration of market dynamics and ongoing performance will be key to maximising returns from this recommended stock.

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