This PSU stock has surged 55% in May—Should you buy?
What's the story
Minerals and Metals Trading Corporation Limited (MMTC), a leading public sector undertaking (PSU) trading firm, has seen its shares surge an impressive 57% in May.
The stock's price jumped 13% on May 29, closing at ₹78.51 per share. This marked a three-day gain of 38%.
The company primarily engages in the import and export of metals and minerals with strategic commodities at its core.
Market details
MMTC's market capitalization and stock performance
MMTC's shares have a 52-week high of ₹131.8 and a low of ₹44.5. The company's market capitalization stands at ₹11,700 crore.
The stock recorded an 8% gain in April and a 6% gain in March. In the last three months, it is up 79%.
MMTC's Q4FY25 earnings report showed a 96.8% year-on-year decline in profit to ₹2.23 crore, down from ₹69.78 crore a year earlier.
Total income also fell 32% YoY, dropping to ₹44.14 crore from ₹64.98 crore in Q4FY24.
Analyst view
Is it too late to buy?
MMTC's sharp rally since March has significantly stretched its valuations, with the stock now trading at a trailing 12-month price-to-earnings (P/E) ratio of nearly 150—well above industry norms.
Technical indicators suggest the stock is currently overbought.
"The rally has been steep and vertical, indicating that profit booking at current levels is highly likely. Traders are advised to book profits and wait for a fresh accumulation or consolidation pattern to develop," said Anshul Jain, Head of Research at Lakshmishree Investments.