GMDC shares dive 11% after as second-quarter profit halves on YoY basis

Gujarat Mineral Development Corporation Ltd shares fell in Thursday's trade after the company reported a drop in its second-quarter (Q2) earnings. The stock slumped 10.81 per cent to hit a day low of Rs 313 over its previous close of Rs 350.95. State-run GMDC posted a 50.6 per cent fall (year-on-year) in its consolidated net profit, at Rs 74.58 crore, for the quarter ended September 30, 2023. The company had recorded a profit of Rs 151.22 crore in the year-ago period.

In Q2 FY24, the consolidated income of GMDC declined to Rs 459.74 crore as against Rs 591.45 crore in the corresponding period last year. Revenue from operations stood at Rs 383 crore compared to Rs 539 crore in Q2 FY23.

EBITDA (Earnings before interest, taxes, depreciation, and amortization) reported was at Rs 130 crore as compared to Rs 223 crore in Q2 FY23.

Total lignite production during Q2 FY24 was 9.15 lakh MT, against 11.40 lakh MT in Q2 FY23, showing a reduction of 20 per cent.

Roopwant Singh, Managing Director of GMDC said, "Q2 FY24 results may not be exceptional, they reflect our determination to overcome obstacles. Our focus remains unwavering, and we are dedicated to achieving better outcomes in the future. Together, we will steer Gujarat Mineral Development Corporation towards greater success in the quarters ahead. Your trust and support are our driving force as we work diligently to enhance our performance and deliver greater value to our stakeholders."

The state-owned mining firm currently has five operational lignite mines located in Kutch, South Gujarat, and the Bhavnagar region. It is purportedly the largest merchant seller of lignite in the country.

GMDC's stock has dropped around 14 per cent in the past five sessions. Despite the mentioned fall, the multibagger counter has gained nearly 104 per cent in six months and 110 per cent on a year-to-date (YTD) basis.

On technical setup, the counter was trading lower than the 5-day, 10-, 20-, 30-day simple moving averages (SMAs) but higher than the 50-day, 100-, 150- and 200-day SMAs. The counter's 14-day relative strength index (RSI) came at 42.26. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 10.32 against a price-to-book (P/B) value of 2.19.

The scrip has an analyst target price of Rs 151, Trendlyne data showed, suggesting a potential downside of 53 per cent in a year. It has a one-year beta of 1.42, indicating high volatility on the counter.

Meanwhile, Indian equity benchmarks were trading higher in today's deals amid positive global cues.

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