Sharekhan's research report on MOIL
Improved pricing environment with 10-15% price hike by MOIL Limited (MOIL) in March 2022 to drive margin expansion going ahead. Sharp 36% rally in international manganese ore price in CY2022 YTD to support realisation and profitability. MOIL is well placed to grow its sales volume and management’s production target of 3mt by CY2030E implies robust 11% CAGR over FY2021-FY2024E. The optimism stems from India’s target to grow steel production by 2.5x to 300mt over CY2021-CY2030E. We conservatively model a 4% volume CAGR over FY2021-FY2024E. Strong cash position and healthy dividend yield of 4-5% provide comfort to investors.
We maintain Buy on MOIL with an unchanged PT of Rs. 220, noting inexpensive valuation of 2.3x its FY2023E EV/EBITDA and strong earnings growth outlook.