Synopsis: Gujarat Mineral Development Corporation (GMDC) surged over 15% recently on strong investor optimism following the Union Cabinet’s Rs. 7,280 crore incentive scheme for rare earth permanent magnet production, boosting its strategic role in green energy and critical minerals.
With market capitalization of Rs. 17,617 cr, the shares of Gujarat Mineral Development Corporation Ltd are currently trading at Rs. 556 per share, increasing 9% in today’s market session, making a high of Rs. 575.65, from its previous close of Rs. 527.45 per share. The stock surged 18% from Nov 25th close of Rs. 487.10 per share to today’s high.
Over the past year, the stock delivered a 59.48% gain, rising 231.05 points. In the past six months, it increased by 54.75%, while over the past month, it declined slightly by 3.92%.
Reason for the surge
Union Cabinet’s approval of a significant Rs. 7,280 crore incentive scheme aimed at boosting domestic production of rare earth permanent magnets (REPM). This scheme includes Rs. 6,450 crore in sales-linked incentives over five years and Rs. 750 crore in capital subsidies to support facilities that convert rare earth oxides into metals, alloys, and finished magnets.
The government’s move is designed to strengthen India’s supply chain for critical minerals, reduce import dependency, and encourage manufacturing in strategic high-tech sectors such as electric vehicles and defense.
Gujarat Mineral Development Corporation Limited (GMDC) surged over 15% in the last two trading sessions due to strong investor interest driven primarily by reports of a potential government incentive scheme for rare earth magnet manufacturing.
This development has fueled optimism about GMDC’s prospects in the rare earth minerals sector, which is strategically important for manufacturing critical components used in industries such as automobiles, defense, and electronics.
The company’s involvement in this sector aligns well with India’s goal of strengthening domestic supply chains for critical minerals, particularly after China lifted restrictions on rare earth magnet exports to India, boosting market sentiment further.
The company is a prominent public sector mining company and one of India’s top lignite producers, has expressed its intention to set up a Rare Earth Elements (REE) processing facility in the country.
Rare Earth Elements are crucial for advancing green energy technologies, including permanent magnets used in electric vehicles, wind turbines, and energy-efficient LEDs, supporting India’s efforts to lower its carbon emissions.
About the company
Gujarat Mineral Development Corporation Ltd (GMDC) is a state-owned company in India, primarily engaged in the exploration and mining of minerals such as lignite, bauxite, and fluorspar. Headquartered in Ahmedabad, Gujarat, GMDC plays a key role in supporting the state’s industrial and energy sectors by supplying raw materials for power generation and manufacturing industries.
For Q2FY26 the company reported a year-on-year decline in sales by 11%, down to Rs. 528 crore from Rs. 593 crore in Q1FY26. EBITDA fell sharply by 51% to Rs. 69.1 crore compared to Rs. 140 crore a year ago. Net profit, however, increased by 264% year-on-year to Rs. 466 crore from Rs. 128 crore. Earnings per share (EPS) surged 264% to Rs. 14.65 from Rs. 4.02 in Q1FY26.
The company demonstrates a financial profile with a Return on Capital Employed (ROCE) of 14.1% and a Return on Equity (ROE) of 10.9%. Its debt-to-equity ratio is a low 0.04, reflecting minimal leverage. GMDC has also maintained a healthy dividend payout of 42.6%, underscoring its commitment to returning value to shareholders.
Written by Manideep Appana
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