Friday, August 25, 2017

STOCK - 2017-MOIL



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%)

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