What do the brokerage houses say?
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Nuvama Institutional Equities says GMDC’s EBITDA for Q3FY26 stood at Rs 103.1 crore, beating brokerage estimates of Rs 86.3 crore. This is 11% more than last year, as the cost of production of lignite was lower than expected.
Although the 250 MW thermal power plant has restarted, there were losses in the power segment due to high initial expenses. The plant is expected to become profitable again in FY27.
Higher production from Bhavnagar mine and the possibility of commencement of Lakhpat mine could lead to about 26% annual growth in production volumes in FY27. Baitarni coal block is expected to commence production from FY27E (estimated).
Keeping in mind the high production costs, we have cut the EBITDA estimate for FY26E by 13%, while the estimates for FY27E and FY28E remain unchanged.
‘REDUCE’ rating on the stock
The brokerage has maintained ‘REDUCE’ rating on the stock and set a target price of Rs 231, based on 6x FY28E EV/EBITDA. This target price is 60 percent below Wednesday’s closing Rs 577. At current market prices, the stock is trading at 19.3x EV/EBITDA for FY27E and 15.1x EV/EBITDA for FY28E.
The stock was a multibagger for investors
The stock of Gujarat Mineral Development Corporation has proved to be a multibagger for investors. The stock has given 118 percent return in 1 year. 59% CAGR or 900% absolute return has been achieved in 5 years.
5 year return: 59% CAGR
3 year return: 60% CAGR
1 year return: 118% CAGR
Market cap: Rs 18,018 crore
1 year high: Rs 651
1 year loan: Rs 226
Stock P/E : 28.2
Book Value: Rs 211
Dividend Yield: 1.72%
about the company
GMDC is a government company and one of the leading companies in India, engaged in mining activities of minerals and lignite (a type of coal). The head office of the company is located in Ahmedabad, Gujarat.
The net profit of this government company in the third quarter (Q3) of the financial year 2025-26 (FY26) was Rs 133.06 crore, which is 9.89% less as compared to Rs 147.66 crore in the same quarter last year. The company’s income from operations also declined by 11.37% year-on-year to Rs 579.15 crore from Rs 653.42 crore in Q3 FY25 last year.
Disclaimer: The views on the stock are given by experts or brokerage houses. These are not the personal views of ET NOW Swadesh. ET NOW Swadesh recommends its readers and viewers to consult their financial advisors before taking any money-related decisions. Mutual fund investment is subject to market risks.
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