Diwali Investment Idea: Ambareesh Baliga bullish on this Navratna PSU Stock - Check targets

Diwali Investment Idea, Navratna PSU Stock to BUY: Diwali, the festival of lights, is just around the corner and people have already started planning for investments. If you are looking to invest in a stock that can give solid returns, NMDC can be a good option as Ambareesh Baliga, an independent market analyst, has picked his Diwali Investment Idea.   

NMDC - Country's largest iron ore company

Navratna PSU company NMDC is currently trading in the range of Rs 220 and it has corrected about 25 per cent from its high. It is the country's largest iron ore company.  Apart from this, it also operates diamond mines.

NMDC, which has received Navratna status and is the country's largest iron ore producer, was established in the year 1958. Apart from iron ore, it also produces minerals like copper, phosphate, limestone, manganese, diamond and tungsten. 

It has four iron ores in Chhattisgarh and Karnataka. It also operates diamond mines in Madhya Pradesh. The company has a wind energy capacity of 10.5 MW. The management plans to achieve the target of 50 metric tonnes of iron ore production by FY26 and take it to 100 metric tonnes by FY30.

NMDC Share Price Target

Keeping all the factors in mind, the experts have estimated the FY26 EPS (earnings per share) of NMDC to be Rs 28. In such a situation, the target has been set at Rs 308 which is based on a P/E multiple of 11. On a TTM basis, this stock is currently trading at around Rs 220 at a P/E multiple of 10.8. The target is 40 per cent higher than the current level.

NMDC's stock made a 52-week high of Rs 287 on May 21, 2024. Currently, the counter has fallen around 25 per cent and is trading in the range of Rs 220. This stock made the year's low of Rs 190 on 15 March 2024. In the month of September, the stock made a low of Rs 205. The low of October is Rs 211. The low of August is Rs 210. In such a situation, the downside risk is quite protected and there is a good opportunity to buy this stock.