Key Events This Week
16 Feb: Downgrade to Strong Sell announced
20 Feb: Technical momentum shifts to mildly bearish
20 Feb: Week closes at Rs.38.91 (-3.59%)
16 February: Downgrade to Strong Sell Amid Weak Fundamentals
On Monday, 16 February 2026, NMDC Steel Ltd was downgraded from a Sell to a Strong Sell rating by MarketsMOJO, reflecting a marked deterioration in both technical and fundamental factors. The stock opened and closed at ₹40.38, registering a marginal gain of 0.05% despite the negative news. This downgrade was driven by a shift in technical indicators from mildly bullish to sideways or bearish, including a bearish weekly MACD and Bollinger Bands, alongside weak long-term financial trends such as a 0% average ROCE and a negative operating profit growth rate of -37.79% annually over five years.
Despite reporting robust net sales growth of 75.67% to ₹6,397.59 crores in the latest six months, the company’s profitability and capital returns remain under pressure. The stock’s valuation was also flagged as risky relative to historical averages, contributing to the cautious stance. Institutional investors hold a 20.48% stake, but the downgrade signals heightened risk for all market participants.
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17-19 February: Continued Price Declines Amid Rising Volumes
Following the downgrade, NMDC Steel’s share price declined steadily over the next three trading days. On 17 February, the stock fell 0.64% to ₹40.12 on increased volume of 116,194 shares, while the Sensex rose 0.32%. The downtrend accelerated on 18 February with a 0.80% drop to ₹39.80 amid a surge in volume to 466,390 shares, contrasting with the Sensex’s 0.43% gain. On 19 February, the stock plunged 2.14% to ₹38.95 on volume of 409,426 shares, coinciding with a sharp 1.45% decline in the Sensex, reflecting broader market weakness.
This period highlighted the stock’s vulnerability to both company-specific and market-wide pressures. The technical trend remained sideways to bearish, with no clear reversal signals emerging. The stock’s price remained well below its 52-week high of ₹49.62, underscoring the lack of sustained recovery momentum.
20 February: Technical Momentum Shifts to Mildly Bearish
On the final trading day of the week, NMDC Steel closed at ₹38.91, down a further 0.10%. Technical analysis revealed a shift from sideways to mildly bearish momentum, driven by bearish weekly MACD and monthly Bollinger Bands, despite mildly bullish daily moving averages. The Relative Strength Index (RSI) remained neutral, indicating indecision among traders. The Know Sure Thing (KST) indicator was bullish weekly but lacked monthly confirmation, while Dow Theory assessments suggested mild bearishness.
On-Balance Volume (OBV) showed a mildly bearish weekly trend, signalling that volume was not supporting price advances, although monthly OBV was bullish, hinting at some longer-term accumulation. The stock’s trading range on 20 February was ₹38.79 to ₹40.19, reflecting volatility and uncertainty. The Sensex closed higher by 0.41%, further emphasising NMDC Steel’s underperformance.
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Daily Price Comparison: NMDC Steel Ltd vs Sensex (16-20 Feb 2026)
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-16 | Rs.40.38 | +0.05% | 36,787.89 | +0.70% |
| 2026-02-17 | Rs.40.12 | -0.64% | 36,904.38 | +0.32% |
| 2026-02-18 | Rs.39.80 | -0.80% | 37,062.35 | +0.43% |
| 2026-02-19 | Rs.38.95 | -2.14% | 36,523.88 | -1.45% |
| 2026-02-20 | Rs.38.91 | -0.10% | 36,674.32 | +0.41% |
Key Takeaways
Negative Technical Momentum: The week saw a clear deterioration in technical indicators, with MACD turning bearish on weekly and monthly charts and Bollinger Bands signalling increased volatility and downside risk. The shift from sideways to mildly bearish momentum suggests caution for near-term price action.
Fundamental Concerns Persist: Despite strong recent sales growth, NMDC Steel’s long-term financial metrics remain weak, including zero average ROCE and negative operating profit trends. These fundamentals underpin the downgrade to Strong Sell and weigh on investor sentiment.
Underperformance vs Sensex: The stock declined 3.59% over the week while the Sensex gained 0.39%, highlighting relative weakness amid a broadly resilient market. This underperformance reflects sectoral headwinds and company-specific challenges.
Volume and Institutional Interest: Elevated trading volumes during price declines indicate active selling pressure, although a 20.48% institutional stake suggests some longer-term confidence. However, the low Market Capitalisation Grade of 3 signals limited market influence.
Conclusion
NMDC Steel Ltd’s week was dominated by a significant downgrade to Strong Sell and a subsequent shift in technical momentum towards bearishness. The stock’s 3.59% weekly decline contrasted with the Sensex’s modest gain, underscoring its relative weakness. While some short-term technical indicators offer mild support, the broader technical and fundamental picture remains challenging. Investors should remain cautious given the deteriorating momentum, weak profitability metrics, and valuation concerns. The ferrous metals sector’s cyclical pressures further complicate the outlook, suggesting that NMDC Steel may face continued headwinds in the near term.
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