Rare earth mining stock GMDC rallies 18% in 8 sessions amid fears of supply disruptions

While China’s efforts to disrupt the global supply of rare earth elements has become the talking point, state-run Gujarat Mineral Development Corporation (GMDC) shares have silently rallied nearly 18% in the past eight trading sessions, remaining unbeaten six times in a row.

Today, GMDC shares surged 2.5% to hit the day’s high of Rs 420.90 on the NSE.

The smallcap stock has seen high investor traction on the BSE and NSE. Today, the volumes were up by 1.11 times on the BSE.

The stock has gained 40% in the past one month, outperforming headline indices Nifty and BSE Sensex by significant margin. The returns by Nifty and Sensex during this period have been 5% and 4%, respectively. The last three months’ gains are at 62%.

GMDC is India’s leading mining and mineral processing company, and the company claims to be the country’s top merchant seller of lignite and the number 2 producer of lignite.

With a market capitalisation of Rs 13,160 crore, GMDC has seen sharp reversal after hitting its 52 week low of Rs 226.59 on March 3. It is just 6% shy of its 52-week high of Rs 439.90.GMDC’s March quarter consolidated net profit was reported at Rs 226 crore, which is growth of 9.2% over Rs 207 crore reported in the year ago period. The consolidated revenue in the quarter under review stood at Rs 904 crore, rising by 10% over Rs 822 crore reported in the corresponding quarter of the last financial year.According to Trendlyne, GMDC’s MFI is hovering near 93 MFI and above 80 it is considered to be strongly overbought. This implies that stock may show pullback. Meanwhile, RSI of 78 is a further indication of the stock trading in an overbought zone. RSI above 70 is considered to be overbought.

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