Is NMDC overvalued or undervalued?

As of 14 August 2025, the valuation grade for NMDC has moved from fair to attractive, indicating a shift in perception regarding its market value. The company is currently considered undervalued, with a PE ratio of 9.34, an EV to EBITDA ratio of 6.66, and a robust ROCE of 32.36%. These metrics suggest that NMDC is trading at a discount compared to its peers, particularly when contrasted with Coal India, which has a PE ratio of 7.15, and GMDC, which is deemed very expensive at a PE of 20.3.
In addition to its attractive valuation, NMDC boasts a dividend yield of 5.47%, which further enhances its appeal to investors. The company's recent stock performance has outpaced the Sensex over the YTD period, with a return of 5.29% compared to the Sensex's 3.15%. Overall, NMDC presents a compelling investment opportunity in the minerals and mining sector, characterized by strong financial ratios and a favorable comparative position among its peers.