GMDC surges 7%; multibagger stock up 109% from March lows; analysts turn bullish

Mutibagger stock: Shares of Gujarat Mineral Development Corporation (GMDC) Ltd witnessed a sharp rise on Monday, snapping a three-session losing streak. The stock surged 7.13 per cent to close at Rs 408.95. Despite the uptick, it remains 13.43 per cent below its recent one-year high of Rs 472.40, touched on July 23. However, the scrip has delivered multibagger returns, soaring 108.84 per cent from its 52-week low of Rs 226.20, recorded around five months ago on March 3 this year.

The strong rally came on the back of select media reports suggesting that the Prime Minister's Office (PMO) is likely to call a key stakeholder meeting to address the ongoing rare-earth magnet crisis. That said, there was no official confirmation on the matter at the time of publishing this report.

GMDC has previously expressed its intention to venture into the critical minerals segment, including rare earth elements. Although the company has not officially disclosed detailed plans, it views rare earths as a potential 'value driver' due to their use in permanent magnets, which are essential for the electric vehicle (EV) supply chain. In May, GMDC announced it had earmarked around Rs 3,000–4,000 crore for critical mineral projects, though it did not provide further specifics.

On the technical front, a few analysts suggested that the counter appeared 'bullish' on charts.

Drumil Vithlani, Technical Research Analyst at Bonanza, noted that GMDC has witnessed a strong bullish reversal from the support zone of Rs 375–380, with a potential upside towards Rs 432 (Target 1) and Rs 455 (Target 2), while placing a stop loss at Rs 374.

According to Sebi-registered independent analyst AR Ramachandran, "GMDC stock price is bullish on daily charts with strong support at Rs 383.6. A daily close above the resistance of Rs 418 could lead to an upside target of Rs 461 in the near term."

The stock traded higher than the 5-day, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs) but lower than the 10-day simple moving average (SMA). Its 14-day relative strength index (RSI) came at 51.05. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The scrip has a price-to-earnings (P/E) ratio of 19.48 against a price-to-book (P/B) value of 2.11. Earnings per share (EPS) stood at 20.99 with a return on equity (RoE) of 10.85. According to Trendlyne data, GMDC has a one-year beta of 1.7, indicating high volatility.

GMDC is a state-owned enterprise and one of India's leading companies in the mining of minerals and lignite. It is headquartered in Ahmedabad, Gujarat.