India’s mining GDP reached a massive ₹82,680 crore in just the third quarter of FY24. The government’s ambitious plan to monetize assets worth ₹28,727 crore by 2025 only adds to the growth momentum.
As global demand for resources continues to rise, this sector offers stability and growth potential. In this article, we will dive into top companies in this sector.
Top 5 Stocks in the Mining and Natural Resources Sector
The mining and natural resource sector is growing rapidly and if you’re an investor looking for top mining stocks to invest in, try adding these 6 stocks to your portfolio.
| Stock | Market Cap | Stock Price as on Nov ‘24 | P/E ratio | P/B ratio |
| Vedanta | ₹1,88,031 Cr | ₹469 | 34.00 | 4.76 |
| Coal India | ₹3,03,299 Cr | ₹434 | 8.00 | 3.67 |
| GMDC | ₹11,384 Cr | ₹363 | 20.00 | 1.86 |
| NMDC | ₹67,829 Cr | ₹234 | 11.00 | 2.64 |
1. Vedanta
Vedanta is one of India’s largest mining companies with a solid global presence. Its portfolio is diverse—spanning metals, oil, gas, power, and more.
The company is planning a massive $20 billion investment to boost silver production and steel capacity. That’s great news for long-term investors looking for stability. Vedanta is also a high-dividend stock, making it attractive for income seekers.
However, keep an eye on their debt—it’s significant, with a debt-to-equity ratio of 2.85 in FY24. The share price of Vedanta is currently at ₹469. While there are risks, like regulatory changes and fluctuating metal prices, Vedanta’s strong revenue and hedging strategies, keep it competitive.
2. Coal India
Coal India is the largest coal producer in India, playing a key role in the country’s energy security. In FY23, coal production jumped to 893 million tonnes, a 22.6% increase since FY19. As a Maharatna company, Coal India produces everything from coking coal to washed and beneficiated coal, even exporting a record 780 million tonnes in FY24.
The company’s dominance ensures stable cash flows, making it a low-risk investment. With almost no debt and a solid price-to-earnings ratio, it’s also undervalued. Plus, income investors will love the 5.18% dividend yield! Looking ahead, Coal India is set to meet growing domestic demand, especially with the government’s push to increase coal production to 1 BT by 2025.
3. GMDC
GMDC, a leading player in Gujarat’s mining sector, focuses on lignite, bauxite, and other key minerals. It plays a vital role in India’s domestic mineral supply, giving it a strategic edge.
GMDC is a zero-debt company, with ₹1,800 crore in cash and liquid investments as of March 2024.
The GMDC share price is at ₹363, is relatively undervalued. Besides mining, GMDC is diversifying into renewable energy, with projects in wind and solar power.
This makes it an attractive choice for investors seeking regional growth and government-backed support for sustainable ventures. Its strong liquidity and zero-debt status make it even more appealing.
4. NMDC
NMDC is India’s largest iron ore producer, fueling the steel industry’s raw material needs. Established in 1958, it operates under the Ministry of Steel and holds a dominant position in the market.
With a low Price-to-Earnings ratio of 11.51 and a solid EV/EBITDA of 6.97, NMDC is considered undervalued. The company offers a reasonable dividend yield of 3.13%. With ambitious plans to boost iron ore production to 100 MT by 2030, NMDC remains a stable investment choice.
Its high-grade iron ore reserves and low-cost production provide a buffer against market volatility, making it attractive for investors seeking consistent cash flow and growth.
Conclusion
In conclusion, the mining and natural resources sector offers solid investment opportunities for long-term growth. Stocks like Vedanta, Coal India, GMDC, and NMDC stand out with their strong market positions, stable cash flows, and growth potential.
As India continues to push for resource self-sufficiency, these companies are well-positioned for future gains. Remember to always research and invest wisely!
