The shares of this Miniratna stock, engaged in the business of mining manganese ore gained attention after Anand Rathi initiated a “Buy” call with an upside target potential of 32 percent.
Company Overview
MOIL Ltd is a state-owned enterprise with Miniratna status, operating under the Government of India. The company is involved in mining manganese ore and is India’s largest producer of the same with a market share of~20 percent domestically and ~2.2 percent globally. It has 3 major business units: Mining Products, Manufactured Products, and Power.
Under Mining Products, the company manufactures and distributes four different grades of manganese ore including high-grade ore to various industries. Under Manufactured Products, it produces electrolytic manganese dioxide (EMD) and ferro manganese. The Power segment includes operations of the company’s wind farms of 20 MW in MP and solar plants of 5.5 MW in PM and 5 MW in Maharashtra.
With a market capitalization of 6,713.99 crore, the shares of MOIL Ltd jumped 1 percent to an intraday high of Rs 329.95 as compared to the previous closing price of Rs 325.60.
The company reached its 52-week high on July 8 2024, at Rs 588.35.
Target
Anand Rathi initiated a “Buy” call on the stock with a 12 month target price of Rs 400 indicating an upside potential of 32 percent compared to its previous closing price.
Rationale
Manganese is a crucial raw material in steel production, used to improve strength, durability, and resistance. MOIL holds a 20 percent market share in India’s manganese ore production and ~21 percent of India’s manganese R&R. The company’s mine environmental clearance, which stood at 2.49m tonnes in FY24, is set to rise to 5m tonnes by FY30; which is expected to drive its domestic market share to ~32 percent.
The company owns 10 mines in the Nagpur and Bhandara districts of Maharashtra and the Balaghat district of Madhya Pradesh. Since these are strategically located in central India, they provide easy access to multiple steel plants, reducing transportation costs and enhancing efficiency.
Analysts predict more than 19 percent revenue CAGR and above 32 percent EBITDA CAGR over FY24-27.
Company Expansion
To sustain its market leadership, the company has devised a strategic plan focused on expanding its existing brownfield and newly developed greenfield mines. MOIL Ltd aims to boost manganese ore production to 3.5 million MT by 2030, with an additional 5 million MT expected from new mines. The company also plans to invest Rs 2,400 crore in phases by 2030 and further, it has planned a capex of Rs 328 crore for FY25 and Rs 340 crore for FY26.
Financial Performance
For the latest quarter Q3 FY25, the company reported a 20 percent year on year increase in revenue to Rs 367 crore. On a quarterly basis, the revenue shot up by 26 percent. This was accompanied by an 18 percent year on year increase in net profits to Rs 64 crore and a 28 percent quarterly increase from Rs 50 crore in Q2 FY25.
Written by Shwetha Sairam
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