(THE NEWSMAN OF INDIA.COM)
Gujarat Mineral Development Corporation (GMDC) stole the spotlight on Friday as its stock surged 11 per cent to ₹503.25 on the BSE, brushing against its all-time high of ₹505. The rally came amid heavy trading volumes, even as the broader market remained subdued, with the BSE Sensex slipping 0.17 per cent to 80,580. Over 8.3 million shares exchanged hands across NSE and BSE, reflecting strong investor interest.

The stock has been on a remarkable upward journey, zooming 122 per cent from its 52-week low of ₹226.20 hit on March 3, 2025. In just the past week, GMDC has climbed 25 per cent, vastly outperforming the Sensex’s 0.5 per cent rise, positioning itself once again as a strong performer in the minerals sector.

Promoted by the Government of Gujarat, which holds 74 per cent stake as of June 2025, GMDC is a dominant player in mining and power generation. It is India’s largest merchant seller of lignite, contributing nearly 85-90 per cent of its operating income, and caters to over 25 per cent of Gujarat’s total lignite demand. Currently, GMDC operates four lignite mines with an estimated reserve of 79-80 million tonnes and has secured six new lignite blocks with reserves of around 360 million tonnes, expected to commence commercial output by FY27.

The company’s June 2025 quarter (Q1FY26) performance underscored steady profitability and strong margins, despite revenue dips caused by a 14 per cent YoY decline in lignite sales volume due to early monsoons. Analysts at CareEdge Ratings project a healthy rebound, estimating sales growth of 10-15 per cent annually in the near term, with PBILDT margins holding steady between 20-23 per cent.

The latest rally is also underpinned by supportive policy tailwinds. The Union Cabinet’s recent approval of a ₹1,500 crore incentive scheme under the National Critical Mineral Mission to boost recycling capacity for extracting critical minerals is expected to strengthen domestic supply chains. GMDC, already advancing its rare earth minerals (REMs) projects in Chhota Udepur, stands to benefit from this initiative, given REMs’ strategic importance in high-tech, green energy, and defence applications.

Beyond lignite, GMDC is rapidly diversifying. It is developing bauxite mines in Kutch and Devbhumi Dwarka, exploring manganese in Panchmahal, and planning underground copper mining near Ambaji. The company also sees potential in downstream integration, particularly in cement manufacturing. Its strategic roadmap aims to increase revenue contribution from non-lignite minerals to around 50 per cent in the medium term, compared to the current 15 per cent.

With a solid base in lignite mining, an expanding footprint in critical minerals, and supportive government policy, GMDC’s growth story appears well-grounded. The stock’s near-record performance signals investor confidence in its ability to balance strong near-term earnings with ambitious long-term diversification plans, positioning it as a key beneficiary of India’s evolving industrial and energy landscape.