Hold MOIL, target price Rs 163: Emkay Global

Emkay Global has given a hold rating to MOIL with a target price of Rs 163. The share price moved down by 0.30 per cent from its previous close of Rs 149.15. The stock’s last traded price is Rs 148.70.

MOIL Ltd., incorporated in the year 1962, is a Mid Cap company (having a market cap of Rs 3537.37 Crore) operating in Mining sector.

For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 152.33 Crore, down 38.74 % from last quarter Sales of Rs 248.66 Crore and down 45.61 % from last year same quarter Sales of Rs 280.07 Crore. The Company reported net profit after tax of Rs 1.88 Crore in latest quarter.


Investment Rationale

While the Chinese steel production rate has been close to its all-time high at around 3mt per day, global Manganese ore prices are still correcting. In response, domestic prices have also corrected. The stock is trading at 3.3x/1.8x our FY22/23 Ebitda estimates and cash represents about 50% of its current market cap. However, in absence of volume growth, delayed expansion plans and weak pricing environment, the stock lacks nearterm triggers. The brokerage maintains Hold on the back of inexpensive valuations and cash rich balance sheet. Weaker-than-expected Manganese ore prices and weak Chinese steel production will be negative.

Promoter/FII Holdings
Promoters held 64.4 per cent stake in the company as of June 30, 2020, while FIIs held 3.1 per cent, DIIs 15.6 per cent and public and others 17 per cent.