Sharekhan's research report on MOIL
Q4FY2021 results were strong with PAT beating estimates by 54% at Rs.116 crore, rising 2.3x q-o-q led by a sharp turnaround in margin at Rs3,775/tonne (up 57% q-o-q) and stronger-than-expected recovery in volume at 0.41 mt (up 31% q-o-q). Improvement in margin was led by higher manganese ore realisation at Rs. 9,914/tonne (up 28.3% q-o-q) as MOIL implemented 15-20% price hike over January-February 2021. MOIL has underperformed the BSE Metal index by 132% in the last one year and we believe that this could reverse as its earnings outlook (expect 37% PAT CAGR over FY21-FY23E) has improved given volume growth visibility and turnaround in profitability.
Outlook
We maintain a Buy rating on MOIL with a revised PT of Rs225. Valuation of 4x FY23E EV/EBITDA is attractive and high cash & cash equivalents of Rs. 1,905 crore (42% of market capitalisation) provides scope for share buyback and high dividend payouts.
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