Result Update: Moil - BUY - TP Rs.410 - Kotak

- MoIL reported strong set of numbers, driven by better realisation and higher other income. Net sales during the quarter grew 19.8% YoY to Rs2.53 bn (down 28.9%). EBITDA declined 11.2% QoQ to Rs1.22 bn, while margin expanded to 48.2% from 38.6% in 3QFY17. Strong margin coupled with higher other income, lead to 14.2% QoQ increase in PAT to Rs1.16 bn. After reporting a stagnant volume for last two years, manganese ore sales volume for FY17 stood at 1.13 MT, up 11.6% YoY, marginally lower than our estimates. MOIL has taken up various projects in its existing mines to expand its capacity to 1.5MT by FY18E and then 2MT by FY21E. With addition to domestic steel capacities along with substitution of imported grade ore, MOIL is well poised to capitalize the domestic demand growth. We expect 2% and 7% YoY volume growth in FY18E and FY19E, respectively. Given its strong business model, robust balance sheet with strong liquidity positions (cash and cash equivalents of Rs20.9bn at the end of FY17E, translates to (~Rs157/share) and its dominant position in the domestic market, we maintain BUY rating, with an unchanged target price of Rs410.

Shares of MOIL LTD. was last trading in BSE at Rs.335.2 as compared to the previous close of Rs. 335.2. The total number of shares traded during the day was 30365 in over 848 trades.

The stock hit an intraday high of Rs. 338.75 and intraday low of 334. The net turnover during the day was Rs. 10194381.

Source : Equity Bulls

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