The State of Gujarat is endowed with minerals and materials which are essential for the growth of various industries. While the state has been in the forefront of industrial development, Gujarat Mineral Development Corporation Ltd. (GMDC) is the country’s leading mining and mineral processing company.
Powering for more than six decades, it has been engaged in the development of mineral resources in the state of Gujarat producing 7.6 million tonnes per annum of Lignite and satisfying one third of Gujarat’s total demand for mineral processing. GMDC is India’s second largest Lignite producing company with deposit rich areas across the state and markets to various high growth industries such as textiles, chemicals, ceramics, bricks and captive power. The company is also involved in the exploration of Bauxite, Fluorspar, Manganese, Silica Sand, Limestone, Bentonite and Ball Clay which finds application across diverse industries from manufacturing of hydrofluoric acid and purifying water to manufacturing glass and ceramic ware and drilling oil.It also has a sizeable presence in the energy sector having a diversified portfolio of Thermal power projects and renewable power generation projects comprising wind and solar power. The Lignite based Thermal power plant is located in Kutch district of Gujarat.
GMDC had ventured into harnessing renewable sources of energy a decade ago and has generated Green Energy with the lignite sourced from its own mines contributing to a sizable generation of thermal power in the state . Since the company has a huge stock of mined out Silica Sand , it is seeking to explore new avenues in the diversified sector and other allied industries for the manufacture of float glass, solar panels, etc.
GMDC has also embarked on a journey of transformation and as part of forward integration it is exploring new opportunities for utilisation of cement grade Limestone for the cement industry. The future outlook for GMDC is extremely bright under increasing contributions from a diversified portfolio.
It is envisioning 5 times growth in the upcoming decade on the back of 4 key strategic priorities. First is the Odisha project wherein it has won 2 coal blocks with over 1600 million tonnes estimated reserves . There is a huge revenue potential of over Rs 5000 crores for the company plus to meet the fuel demand in the state of Gujarat . Second is the 5 new Lignite reserves to be operationalised across Gujarat throwing revenue potential of over Rs 7000 crores targeted to meet the fuel demand and reduce dependence on imported coal. Third is the Limestone Mining project in Kutch , Gujarat and by downstream integration, GMDC plans to enter the cement business. Since Gujarat is a cement supply deficit state , the revenue potential for the company can be over Rs 2000 crores . The Fourth bet the company is undertaking is Metal mining which can give a revenue potential of around Rs 1000 crores.
While the Q1 financial results of FY24 of GMDC were disappointing and the stock had plummeted to a low of Rs 175 on the bourses in August 2023 . Since then it has recovered strongly to touch Rs 328 as of date . Gujarat has recently announced a new PSU policy wherein Gujarat PSU’s will now have to declare dividend equivalent to 30% of the post tax profit or 5% of the net worth , whichever is higher. Stock market has taken a very positive attention regarding the recent government’s rules relating to minimum dividend payment , bonus and buy back of shares.
Analysts tracking the company have informed the media that high net worth individual investors have been very active buyers in the GMDC stock recently and the street is expecting a corporate development to take place in the stock soon . Portfolio investors can buy the GMDC stock after taking advice from their financial advisor and risk due diligence.