- Recently the compnay got approvals to mine up to a depth of 135 meters from its earlier approved depth of 94 meters from the Tadekeshwar lignite mines of the Surat District.
- The lignite miner reported an increase in mining volumes and had a strong turnaround in the December quarter
Amid volatility in Friday’s market, shares of GMDC (Gujarat Mineral Development Corporation) surged 3.60% in intraday trade to hit a 52-week high on the BSE.
The shares of this government company have surged by 18.34% in the last 5 days, by 124.25% in the last six months and by a whopping 162.79% in one year. Currently, the stock is near its 52-week high of ₹168.95 apiece as it closed at ₹161.65 on Friday.
Though Dalal Street witnessed its highest volatility in the last 20 months, GMDC’s shares soared as its management is focused on increasing volume.
Santosh Meena, Head of Research, Swastika Investmart Ltd, believes that its shares can surge by more than 40% from their current levels.
“GMDC is in a strong bullish momentum where it has witnessed a breakout of long-term downsloping trendline resistance. It is taking support at 20-DMA and outperforming the overall market where we can expect an immediate target of Rs 180,” said Meena. “On the downside, 20-DMA of Rs 135 is immediate support, while Rs 115 is major support at any correction,” he added.
“If the stock sustains above the intraday low of 140 levels, then it should head higher to test the interim top-placed around 180 levels. Therefore, positional traders can look to buy now and should prepare to add on a dip into the zone of 150 – 145 levels. A stop-loss suggested for the trade is a close below 140 levels,” said Aazhar Mohammad, Chief Strategist – Technical Research and Trading Advisory, Chartviewindia.in.
GMDC is a leading mining company in India that sells lignite. The Union Ministry of Environment and Forest in mid-February 2022 approved an amendment to its environment clearance to the GMDC to mine up to a depth of 135 meters from its earlier approved depth of 94 meters from the Tadekeshwar lignite mines of the Surat District.
The lignite miner reported an increase in mining volumes and had a strong turnaround in the December quarter. Analysts expect that the business momentum will continue given the focus on increasing volume further in the coming years along with an improvement in profitability.
In the October to December quarter, it reported a total income of ₹763.87 crores against ₹494.30 in the September quarter. Its profit after tax jumped from ₹41.13 crores to ₹494.30 crores. It clocked an EBITDA of ₹202 crores against ₹27 crores in the September quarter.
According to reports, an increase of 20 lakh MT of lignite production is expected this year as compared to the previous year, as it has already achieved 64.64 lakh MT of production till 23/1/2022 and has a target of 86.83 lakh MT.
Analysts from different brokerages have set a buy call on the mid-cap stock, for an immediate target price at Rs 180-200/share, especially if it sustains above intraday lows of ₹140 levels. A few analysts have suggested that positional traders can look to buy now and add more shares if the prices dip to 150-145 levels. They have suggested a stop loss of ₹140.
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