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MOIL Limited - Stock Analysis

HomeMOIL Limited – Stock Analysis

Price:Rs. 218

View: Strong Buy

Founded in 1962, MOIL Limited (“MOIL or Company”) is a Schedule “A” Miniratna Category-I company. Originally, incorporated as Manganese Ore India limited, later on changed its name to MOIL Limited at the timeof its listing at the stock exchange during 2010-2011 (precisely on 15th November 2010). After the listing, the Govt. of India, Govt. of Maharashtra and Govt. of Madhya Pradesh held approximately 71.57%, 4.62% and 3.81% of shares of MOIL respectively. Rest 20% shares are held by public.

MOIL sells 4 grades of manganese ores and products from its 10 mines located in Madhya Pradesh and Maharashtra. Major product qualities are:

  • High Grade Ores for production of Ferro manganese
  • Medium grade ore for production of Silico manganese
  • Blast furnace grade ore required for production of hot metal and
  • Dioxide for dry battery cells and chemical industries.

Location

Of the 10 mines, 6 are located in Maharashtra and 4 are in Madhya Pradesh. 7 are underground mines and rest all are open cast. MOIL fulfills about 50% of the total requirement of dioxide ore in India. At present, the annual production of dioxide ore is around 1.1 million tonne. MOIL has set up a plant based on indigenous technology to manufacture 1,000 MT per annum capacity of Electrolytic Manganese Dioxide. A Ferro manganese plant having a capacity of 10,000 MT per annum was also set up in 1998 by MOIL for value addition.

Production Capacity

Category

2016-2017

2015-2016

2014-2015

2013-2014

2012-2013

2011-2012

Manganese Ore (MT)

1,004,845

1,032,275

1,139,156

1,134,508

1,138,895

1,070,717

E.M.D (MT)

731

612

950

923

786

714

Ferro Manganese (MT)

9,950

6,519

10,045

10,042

9,210

8,694

MOIL has installed 4.8 MW Wind Energy Farm at Nagda Hills and 15.2 MW Wind Farm at Ratedi Hills, Dist. Dewas in Madhya Pradesh to promote non-conventional source of energy.

Despite a spike in employee cost and other expenses, the company reported 107% increase in net profits for the Q1 FY18.

Financial Analysis

(in Rs. crores)

2016-2017

2015-2016

2014-2015

2013-2014

2012-2013

2011-2012

Revenue from operations

989.84

634.60

831.16

1028.45

975.03

905.68

Growth

56%

-24%

-19%

5%

8%

EBITDA

516.61

322.72

695.65

804.51

669.82

636.54

EBITDA Margins

52%

51%

84%

78%

69%

70%

Profit After tax

305.83

172.98

428.01

509.56

431.72

410.77

Profit Margins

31%

27%

51%

50%

44%

45%

(Per share values)

 

 

 

 

 

 

Dividend

66.6

84.0

142.8

126.0

92.4

84.0

Earnings per share

20.2

10.3

25.5

30.3

25.7

24.5

Payout Ratio

3.3

8.2

5.6

4.2

3.6

3.4

DEBT FREE COMPANY

The company operates with zero debt (including short term and long term). MOIL is a cash rich company with ~ Rs.2092.02 crores of cash and cash equivalents at the end of 31st March 2017. Its total assets have reduced for the FY2016-2017 owing to reduction in the cash and cash equivalents which the Company has deployed for increasing its production capacity. It is particularly impressive that MOIL has managed to remain debt free despite a persistent slowdown in the metals space over the past few years.

Revenues for the company have been constant across the years except for 2015-2016 during which time they fell by ~ 24% owing to slashing of prices of manganese ores. Over the past 10 years, revenue for the company has grown at a meagre CAGR of 1.78% but the Company has consistently reported profits for all these years.

Capital work in progress has doubled as compared to the financial year, from 69.13 crores to 117.74 crores.

HIGH DIVIDEND PAYOUT, STRONG RESERVES AND BOOK VALUE

Moil dividend payout ratio

Current Dividend Yield of MOIL (as of 7 December 2017) – 5.07%

MOIL’s dividend payout ratio has been constantly rising. The dip in payout for FY 2016-17 seen in the chart above should be considered insignificant due to fall in profit levels because of slashing of manganese prices in FY 2015-2016. Also, for FY 2016-2017market is getting back its momentum; going forward our forecast on metals remains bullish on account of ban of imports from China.

MOIL’s book value per share has increased over time. It has increased by ~ 28% between 2012-2013 and 2016-2017 as depicted in the chart below.

MOIL Book value

FINANCIAL SNAPSHOT

(in Rs. crores)

 

 

 

 

 

Particulars

FY 2017

FY 2016

FY 2015

FY 2014

FY 2013

Total Income from Operations

 989.84

 628.74

 823.25

 1021.28

 967.12

Expenses

 749.07

 589.80

 489.29

 555.28

 565.61

Earnings Before Other Income, Interest, Tax and Depreciation (Operating Profit)

 240.77

 38.94

 333.97

 466.01

 401.51

Depreciation

 54.71

 52.47

 45.08

 35.18

 33.03

Finance Costs

 156.07

 –  

 –  

 –  

 –  

Other income

 –  

 252.16

 316.61

 303.32

 235.27

PBT

 461.90

 270.26

 650.57

 769.33

 636.78

Tax

 156.07

 97.27

 222.56

 259.76

 205.06

PAT (before Minority Interest and share of Associates)

 305.83

 172.98

 428.01

 509.56

 431.72

Profit/ (loss) attributable to Minority Interest

 –  

 –  

 –  

 –  

 –  

Share of profit / (loss) of Associates

 –  

 –  

 –  

 –  

 –  

Consolidated Profit / (Loss) for the year

 305.83

 172.98

 428.01

 509.56

 431.72

About the Author

Rajat Sharma pictureRajat Sharma is a well known stock market analyst and commentator. He has covered Indian markets for over a decade and is regarded for consistently identifying early stage investment opportunities. Attorney by qualification, Rajat has done extensive work for improving corporate governance and disclosure standards.