Angel Broking neutral on MOIL

“For FY2012, MOIL’s net sales and EBITDA decreased by 21.1% and 43.5% yoy, respectively, mainly due to a steep decline in manganese ore prices. We recommend a Neutral rating on the stock.”

“During FY2012, MOIL’s net sales decreased by 21.1% yoy to Rs900cr (slightly below our estimate of Rs972cr) mainly on account of the decline in average realization (down 33% yoy and 21.4% qoq to Rs6,279/tonne) because of the increase in the proportion of fines in comparison to ferro-grade in the mix of manganese ore sales. For FY2012, the company’s EBITDA decreased by 43.5% yoy to Rs433cr. The company’s EBITDA margin dipped by 1,910bp yoy to 48.2% as the company slashed its prices by 5-12% during the year. Other income, however, increased by 39.7% yoy to Rs203cr. Consequently, net profit decreased by 30.1% yoy to Rs411cr, in-line with our estimate of Rs408cr.”

“Manganese ore prices have gradually slumped by over 40.0% since January 2011 on the back of oversupply in global markets. Although MOIL has raised manganese ore prices modestly during 1QFY2013, we do not foresee any meaningful rise in manganese ore prices in the coming year. Hence, we recommend Neutral on the stock,” says Angel Broking research report. 

Institutional holding more than 40% in Indian cos

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