Today, we recommend two dividend-paying stocks, one from the Metal & Mining sector and another from the Financial Services sector, recommended by the Trade Brains Portal, to buy for an upside potential of more than 23%. We also analyzed the market’s performance on Thursday to understand what may lie ahead for the stock indices in the coming days.
- Current price: ₹69
- Target price: ₹83
- Upside: 20.2%
- Time frame: 12 Months
Why it’s recommended
Established in 1958, NMDC Ltd. is India’s largest and a major iron ore producer. Headquartered in Hyderabad, it operates four mechanized mines: Bailadila Iron Ore Mines Kirandul Complex, Bailadila Iron Ore Mine Bacheli Complex in Chhattisgarh, Donimalai Iron Ore Mine, and Kumaraswamy Iron Ore Mine in Karnataka. Besides iron ore, NMDC is the only organized diamond producer in India, extracting from the Majhgawan mine in Panna, Madhya Pradesh.
FY25 marks the beginning of a 4 to 5-year plan to double capacity from about 50 MT to 100 MT. The company acquired 1,167 acres from RINL near Gangavaram Port for Rs 1,500 crore, a key part of its 100 MT expansion plan. It aims for a production and sales target of 55.4 MT for FY26, showing strong potential for over 10% volume growth, with no major constraints in evacuation or market demand. Capex reached its peak this year at Rs 3,700 crore. For FY26, management expects a capex of Rs 4,000-4,200 crore, with plans to increase to over Rs 10,000 crore annually in FY27-FY28 as major projects move from sanction to execution.
By Q2 FY26, around Rs 43,000 crore worth of projects are at various stages of implementation, with an additional Rs 31,000-32,000 crore of projects under consideration, including two major slurry pipelines (Kirandul–Bacheli and Nagarnar–Vizag) costing around Rs 20,000 crore combined. Two coal blocks and two iron ore blocks under the NMDC-CMDC joint venture are expected to become operational in FY26. Management sees a significant opportunity in coking coal, with India’s imports projected to rise to 150–160 MT.
NMDC Limited has a consistent record of paying dividends, with recent payouts including Rs 2.30 per share as an interim dividend for FY25, Rs 7.25 per share for FY24, Rs 5.91 per share for FY23, and a notably high Rs 14.74 per share for FY22.
Risk Factor
The company remains vulnerable to the cyclicality of the steel industry, as iron ore is the key raw material for steel production. Therefore, NMDC’s volume and profitability may suffer from any drop in steel sector demand. NMDC is subject to both price volatility and significant swings in the demand for its goods. Declining iron ore prices, particularly on the global market, will encourage steel companies to import and put pressure on domestic supply and prices.
- Current price: ₹415.45
- Target price: ₹513
- Upside: 23.5%
- Time frame: 12 Months
Why it’s recommended
Incorporated on July 16th, 1986, Power Finance Corporation Ltd. is a Schedule-A Maharatna CPSE and a leading non-banking financial company in the country. PFC is the largest NBFC by net worth and holds 20% of the market share. The company offers a variety of goods and services that meet the needs of the power industry, including short-term and long-term loans, equipment lease finance, and transitional financing for a range of power projects in transmission, distribution, and generation sectors.
PFC surpassed Rs 5 trillion in loan assets, with its renewable portfolio more than doubling over the last five years. In FY25, the company reported a PAT of Rs 30,514 crore, a 15% increase from the previous year. The group loan asset book exceeded Rs 11 lakh crore, growing by 12%. The net NPA ratio for FY25 is 0.38%, compared to 0.85% in FY24. The yield for FY25 stands at 10.02%, with the cost of funds at 7.44%, resulting in a spread within the guided range of 2.58%. The company’s guidance for FY26 is around 2.5%. The net interest margin for FY25 is 3.64%.
PFC’s net worth reached Rs 90,937 crore as of March 31, 2025, reflecting a notable 15% year-over-year increase. The capital adequacy ratio for FY25 is 22.08%, well above the minimum regulatory requirements. The company successfully resolved the Rs 3,300 crore KSK Mahanadi project in Q4 FY25. PFC achieved 100% principal recovery against the acknowledged claim of Rs 4,448 crore for KSK and earned Rs 1,192 crore in interest income. The Sinnar Thermal Power Project, with an outstanding amount of Rs 3,000 crore, is a 1,350-megawatt coal-based plant being resolved under NCLT, as is India Power Haldia, which has an outstanding amount of Rs 959 crore and is also a 450-megawatt coal-based plant under NCLT.
A final dividend of Rs 2.05 per share was announced by PFC. The total dividend for FY25 is Rs 15.80 per share, which includes the cumulative interim dividend of Rs 13.75 per share that was previously paid.
Risk Factor
PFC Ltd. faces potential concentration risk due to its significant exposure to the power sector, particularly to financially stressed power utilities, which could lead to higher non-performing assets (NPAs). Additionally, fluctuations in interest rates and foreign exchange rates can impact borrowing costs and profitability.
Market Recap July 3rd, 2025
The Nifty 50 ended Thursday’s session lower by -0.19%, or -48.10 points, after starting the day at 25,505.10, touching a day’s high of 25,587.50, and closing at 25,405.30. The BSE Sensex opened at 83,540.74, indicating a bearish trend, and closed at 83,239.47, down 170.22 points, or 0.20%. With the Nifty 50 RSI at 59.74 and the BSE Sensex RSI at 58.46 (below the overbought threshold of 70), both indices were trading above the three EMAs (50/100/200). India VIX hit a 9-month low of 12.39 since October 2024, providing a comfort zone for investors.
On Thursday, sectoral indices showed mixed trends. The Nifty Media index was the biggest sectoral gainer, closing at 1,750.15, up 25 points, or 1.45%. The largest companies, including Nazara Technologies, which gained 2.96%, and Zee Entertainment surged 2.08%, while Network 18 Media and PVR Inox reported gains of up to 1.91%. The Nifty Consumer Durable index was also among the top gainers, closing at 39,126, up 218.50 points, or 0.56%. The big movers, including Blue Star, which gained 4.91%, and V-Guard Industries surged 2.88%, while Voltas and PG Electroplast gained more than 2%.
Whereas the Nifty PSU Bank index ended the day at 7,129.9, down -63.75 points, or -0.89%. Punjab National Bank, Union Bank of India, and UCO Bank were the top losers in the industry with a decline of up to -3%. The Nifty Metal Index was also in red on Thursday, ending the day at 9,623.45, down -75.75 points, or -0.78%. Stocks like Vedanta Ltd, Welspun Corp, JSW Steel, and Jindal Steel and Power were the top losers of this index, declining up to 2.38%
In contrast, Asian markets were mostly green. In the Asia-Pacific markets, the Kospi index in South Korea continued its upward trend, rising 1.32%, or 41.21 points, to close at 3,116.27. while the Hang Seng index in Hong Kong declined -0.63%, or 151.47 points, to close at 24,069.94. Japan’s Nikkei 225 closed at 39,785.90, up 23.42 points, or 0.06%. The Shanghai index ended the day at 3,461.15, up 6.36 points, or 0.18%. The US market saw the US Dow Jones Futures close at 44,555.07 (4:28 PM), up 70.65 points, or 0.16%.
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