1. Identifying Value when the index is near
life time highs is a challenge . And
yet, if you diligently seek, U may find!! I Think MOIL is one such stock in
times as these.
2. MOIL has reserves of 81.47 MT as per its
last annual report. It has seven mines in Maharashtra and three in Madhya
Pradesh with a total mining area of 1,614 hectares, as of March 31, 2016. It
acquired new mining area of 988 hectares and was allotted an additional 384
hectares by the Madhya Pradesh government. While there are several other
players in this space, MOIL towers over them with 50% market share and the
quality of its manganese ore which commands a premium in the market place. My
reasons for this stock :-
(a) About 95% of manganese ore is used in
steel-making, directly or indirectly. India is still dependent on manganese ore
imports to meet around one-third of the steel producers’ requirement.
(b) The
government is looking at boosting the country’s overall steel capacity to 300
MT by 2025.
(c) For
the quarter ended June 2017, the company reported strong 84.9% year on year
growth in revenue. This was led by higher volumes (up 20.9%) as a result of
pickup in domestic steel demand and realisation that benefitted from higher
international manganese prices.
Numbers
3. Now
for some number crunching:-
(a) Market Capitalisation – 4800 Crores
(b) Cash in Hand -2300
Crores (195 Rs/share)
(c) Annual profits ( average / conservative) - 400
Crores
(d) EPS - Rs 25
(e) Yield - 2%
Looks
a good candidate for SIP for a TP of 450 Rs at least in 12-18M
(
ROI-25-30%)
