MOIL Ltd. share price target

MOIL delivered a disappointing quarter with volumes at 254kT (5.0% YoY, -33.3% QoQ), a disappointment given earlier indications of contracted quantity at 391kT for 1QFY17. EBITDA margins at 18.6% (44.0% in 1QFY16, loss in 4QFY16) remain depressed. Mn ore prices have been volatile with sharp jump seen in mid-August (23% in a week, 63% in a month). Current prices of US$4.46/dmtu look high given some of the Chinese demand may be temporary, but should help MOIL hike prices when it appraises its pricing next. We believe US$2.75-3.00 is a more sustainable price range given slightly more than 50% capacity is profitable at those prices.

Despite the impending buyback (~20% of outstanding equity), cash will still form a large proportion of the market cap (62% of FY17E cash balance), implying lower stock price sensitivity to changes in business environment. Maintain Neutral with a TP of Rs 242/sh (5.0x FY18 EV/EBITDA).

 

MOIL posted mixed set of numbers in 1QFY17. While realization saw a sequential up-tick, volumes came in below our estimate. Sales volume fell 33% qoq (+5% yoy) to 0.254mnT (vs. our estimate of 0.275mnT), while blended realization rose by 24% qoq (-8% yoy) to Rs6,418/tonne marginally lower than our estimate of Rs6,650/tonne. Notably, realization was the highest in 4 quarters. Its EBITDA fell 57% yoy to Rs342mn (vis--vis EBITDA loss in 4QFY16), which missed our estimate of Rs669mn due to lower-than-estimated volume and realization. Besides lower realization, MOIL saw certain one-off costs pertaining to superannuation...

MOIL posted mixed set of numbers in 4QFY16. Its volume grew ahead of our estimate, but at the cost of realization, which stood at the lowest level since FY07. Sales volume rose by 44% yoy & 111% qoq to 2.87 lakh tonne v/s our estimate of 2.1 lakh tonne. Blended realization fell 39% yoy & 19% qoq to Rs4,639/tonne v/s our estimate of Rs6,350. MOIL posted Rs258mn EBITDA loss in 4QFY16 v/s EBITDA profit of Rs755mn in 4QFY15 & Rs153mn in 3QFY16. Certain on-off costs during 4Q like retirement benefits, royalty, contribution to District Mineral Foundation (DMF) etc. worsened the matters further for which MOIL reported an adjusted loss...

MOIL missed our estimates (EBITDA: Rs 153 mn vs estimated Rs 227 mn, -85.2% YoY, -22.4% QoQ). However, the miss on revenues was higher (Rs 878 mn vs est Rs 1.31bn, -59.8% YoY, -40.1% QoQ).

MOIL posted dismal numbers in-line with the current challenging environment. Sales volume declined by 47% yoy and 35% qoq to 136,000tonnes, significantly lower than our estimate of 185,000tonnes. Blended realizations at Rs5,698/tonne (our est. Rs5,338) fell 31% yoy and 8% qoq. EBITDA at Rs153mn fell ~85% yoy and 22% qoq and was lower than our estimate of Rs213mn largely due to lower volumes. Margins at 17.4% fell 2,990bps yoy, but increased 397bps sequentially. Adjusted PAT, consequently, fell 50% yoy, but increased 11% qoq to Rs540mn against our estimate of Rs418mn. Net cash at the end of 9MFY16 stood at Rs30bn...

Manganese (Mn) is a critical steel input, a key part of the production process and a source of important mechanical properties. It is mostly used in the form of alloys Silicomanganese (~65%) and Ferromanganese (~35%).

MOIL (Manganese Ore India Ltd) posted dismal numbers in-line with the current challenging environment and DMF retrospective provisioning. Sales volume declined by 13% yoy and 14% qoq to 208,000 tonnes lower than our estimate of 245,000 tonnes. Blended realizations at Rs6,207/tonne fell 29% yoy and 11% qoq, which was again lower than our estimate of Rs6,600. EBITDA at Rs197mn fell ~81% yoy and 76% qoq and was significantly lower than our estimate of Rs765mn due to lower volumes coupled with DMF provisioning with retrospective effect from Jan 2015. Margins at 13.4% fell by 2,846bps yoy and 3,108bps sequentially. Adjusted...

MOIL posted strong numbers despite a challenging environment. Sales volume staged a recovery during the quarter by increasing 13% yoy and 21% qoq to 242,000 tonnes above our estimate of 210,000 tonnes. Blended realizations at Rs6,967/tonne fell 8% yoy and 17% qoq, which was largely in-line with our estimate of Rs6,990. EBITDA at Rs822mn fell ~17% yoy, but increased ~9% qoq and was higher than our estimate of Rs735mn due to volume beat. However, EBITDA margins at 44.5% fell 227bps sequentially and 458bps yoy. Adjusted PAT increased 15.2% qoq, but fell 15.2% yoy to Rs899mn in-line with our estimate...

MOIL reported weak numbers in Q3FY15 during which sales de-grew by 10% on q-o-q basis and 17% on y-o-y basis. EBITDA grew by 2.6% on q-o-q basis because of higher closing stock and de-grew by 26.5% on y-o-y basis. However, the EBITDA margins expanded from 37% to 43% on q-o-q basis

MOIL Quarterly Review