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Buy MOIL; target of Rs 195: Sharekhan

Sharekhan is bullish on MOIL has recommended buy rating on the stock with a target price of Rs 195 in its research report dated August 03, 2022.

August 05, 2022 / 10:23 PM IST
 
 
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Sharekhan's research report on MOIL


Q1FY23 operating profit/PAT of Rs. 148 crore/Rs. 103 crore, up 77%/66% y-o-y was above our estimate as beat in margins more than offset the miss in volumes and lower other income. EBITDA margin of Rs. 5,229/tonne, up 63% y-o-y was 20% above our estimate, supported by price hikes and a lower-than-expected cost. Volumes stood of 0.28 mt (up 8% y-o-y; down 25% q-o-q) missed our estimate of 0.31mt as steel demand got affected by export duty. MOIL took a net price cut of 5% in Q1FY23 given softness in international manganese ore prices in August, yet current price remains healthy at $7.4/dmtu (above Q2 level of $6.6/dmtu). This bode well for sustained strong margins.



Outlook


We maintain a Buy rating on MOIL with a revised PT of Rs. 195 given reasonable valuations of 3.2x FY24E EV/EBITDA (despite a rally of 16% in MOIL’s stock price in last one month), dividend yield of 4% and high cash on the books. Likely removal of steel export tax could improve sentiments for the sector.

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MOIL - 040822 - khan

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first published: Aug 5, 2022 10:23 pm
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