MMTC Shares Rally Over 13% Despite Weak Q4 Results: What's Driving the Surge?

MMTC Shares Rally Over 13% Despite Weak Q4 Earnings: Market Bets on Strategic Momentum

Mumbai, May 29, 2025 — In an unexpected turn of events, shares of Metals and Minerals Trading Corporation of India (MMTC) surged by over 13% on Wednesday despite the company reporting a significant decline in its Q4 FY24 earnings. The rally took investors by surprise, raising questions about the underlying factors propelling the stock price upward in the face of weak financials.

Weak Financials Paint a Gloomy Picture

For the quarter ending March 2024, MMTC posted a 52% year-on-year drop in consolidated net profit, landing at ₹24.1 crore compared to ₹50.2 crore in the same quarter last year. Revenue from operations declined 21% YoY to ₹1,375 crore, reflecting challenges in both international trade flows and commodity pricing.

Expenses also edged higher due to increased logistics costs and volatility in metal prices, eroding operating margins. The EBITDA for the quarter stood at ₹40 crore, down from ₹72 crore in Q4 FY23, with EBITDA margins contracting to 2.9%.

So Why Is the Stock Rallying?

Despite the underwhelming performance, MMTC shares soared as much as 13.4% intraday on the NSE, closing at ₹78.55 per share — their highest level since February 2023. The rally appears to be driven by a mix of market speculation, strategic developments, and broader sector optimism.

According to Ramesh Tiwari, Senior Analyst at Prithvi Finmart, "While the Q4 numbers are not flattering, the market seems to be pricing in MMTC’s long-term strategic relevance in critical mineral trade, especially amid rising government interest in rare earths and strategic metals."

Investors are also eyeing the company’s involvement in gold imports, coal trading, and fertiliser exports, areas likely to benefit from evolving trade dynamics and geopolitical alignments.

Public Sector Stock Momentum

The rally also coincides with broader strength in public sector undertakings (PSUs), many of which have seen heightened investor interest since the beginning of the calendar year. Stocks like BHEL, SAIL, and NMDC have shown resilience, suggesting that sentiment around PSUs is improving despite inconsistent fundamentals.

"MMTC is part of that PSU sentiment wave," said Priya Menon, Equity Research Head at Kriya Investments. “With general elections concluded and expectations of policy continuity, PSU stocks are witnessing speculative positioning. MMTC, being asset-light and strategically placed, is reaping the benefit.”

Retail Frenzy and Technical Indicators

Retail interest in the stock has been on the rise. Data from NSE shows a sharp uptick in volumes — nearly 3x the 30-day average — indicating momentum-driven buying.

On the technical front, MMTC breached a key resistance at ₹70 with strong volume confirmation, pushing the Relative Strength Index (RSI) into overbought territory at 79. While this suggests a possible short-term pullback, traders appear willing to ride the momentum for now.

Government Policy Tailwinds?

Some market participants are speculating on potential policy support in the upcoming Union Budget (expected in July 2025), particularly around mineral trade, rare earth elements, and strategic commodity storage — all areas where MMTC is a designated nodal agency.

"Policy cues in the budget could position MMTC to play a bigger role in India's supply chain security strategy," said Amit Trivedi, a Delhi-based commodity analyst. "Investors may be anticipating a re-rating if such plans materialize."

Investor Outlook: Caution Amid Optimism

Despite the recent rally, analysts urge caution.

“Fundamentally, MMTC’s weak earnings cannot be ignored,” warned Manoj Bhagat, Market Strategist at Ventus Capital. “If this rally is purely speculative, it may not sustain. Long-term investors should wait for clarity on earnings visibility and strategic roadmap.”

Others believe the stock could remain volatile in the near term but holds promise if the company executes on strategic realignment and benefits from policy moves.

Final Word

MMTC’s share price rally stands in stark contrast to its quarterly performance. While momentum, strategic positioning, and policy expectations are driving the surge, the divergence between financials and stock price warrants close attention. For now, retail investors may be enjoying the ride, but sustainability will depend on whether the company can convert potential into performance.