Shares of Gujarat Mineral Development Corporation (GMDC) jumped 11 per cent to ₹503.25 on the BSE during Friday’s intra-day session, supported by robust trading volumes in an otherwise weak market. At 10:42 AM, while the benchmark Sensex slipped 0.17 per cent to 80,580, nearly 8.3 million GMDC shares changed hands across NSE and BSE, reflecting heightened investor interest.
In the past week alone, the stock has advanced 25 per cent, far outperforming the Sensex’s marginal 0.5 per cent gain. The scrip is now trading close to its all-time high of ₹505, last touched in February 2024, and has more than doubled—up 122 per cent—from its 52-week low of ₹226.20 recorded in March this year.
Government-backed growth story
Promoted by the Government of Gujarat, which holds a 74 per cent stake, GMDC is India’s largest merchant seller of lignite and the second-largest lignite producer overall. The company caters to nearly one-fourth of Gujarat’s total lignite requirement, with lignite contributing around 85–90 per cent of its operating income.
The Union Cabinet’s recent approval of a ₹1,500 crore incentive scheme under the National Critical Mineral Mission (NCMM) to enhance domestic recycling and production of critical minerals has further boosted sentiment for mineral-focused companies such as GMDC.
Operational performance and expansion
Despite a revenue decline, GMDC reported healthy margins and profitability in Q1 FY26, supported by operational efficiency. As of March 2025, it operates four lignite mines with reserves of about 80 million tonnes and a mine life of nearly a decade. Six additional lignite blocks with combined reserves of around 360 million tonnes have also been allotted, with commercial output expected to begin in late FY26 or early FY27.
The company’s Bhavnagar mine expansion and new blocks are projected to drive production growth. Although Q1 FY26 lignite sales volumes fell 14 per cent year-on-year due to early monsoon, CareEdge Ratings expects sales to grow 10–15 per cent annually in the near-to-medium term. Margins are anticipated to stay healthy at 20–23 per cent.
Diversification into critical and industrial minerals
In addition to lignite, GMDC is ramping up efforts in rare earth minerals (REMs) at Chhota Udepur, Gujarat. REMs are vital for advanced technologies including electronics, renewable energy, and defence applications. The company also holds resources of bauxite, silica sand, fluorspar, limestone, and manganese, and is evaluating underground copper projects near Ambaji.
With downstream integration, including potential ventures into cement manufacturing, GMDC aims to increase revenue contribution from non-lignite minerals to nearly 50 per cent over the medium term, compared with under 15 per cent at present.
Outlook
With strong government backing, steady demand from Gujarat’s manufacturing industries, and aggressive expansion across both lignite and non-lignite minerals, GMDC is well-placed to sustain growth. Analysts expect the company’s long-term focus on diversification and efficiency to support healthy profitability and valuation momentum.
