MOIL Ltd (Q4 FY14)

India Infoline News Service | Mumbai |

MOIL in Q4 FY14 registered a growth of 9.4% yoy and 10.8% qoq to Rs2.9bn, also higher than our estimate of Rs2.8bn.

CMP Rs320, Target Rs330, Upside 3.4% 
  • Topline of Rs2.92 was higher than our estimate of Rs2.85bn, boosted by strong manganese ore volumes

  • Ore production too was strong at 9.1% qoq and 0.8% yoy to 0.34mn tons

  • Blended realisations were lower due to lower ferro manganese sales volume and lower than expected increase in ore realisations

  • EBIDTA/ton of Rs4,982 was lower than expected due to lower blended realisations

  • Tight managanese ore market to support price hikes; Trading near fair value; Downgrade from BUY to MP with a revised price target of Rs330

Result table
(Rs mn)
Q4 FY14
Q4 FY13
% yoy
Q3 FY14
% qoq
Net sales
2,920
2,668
9.4
2,636
10.8
Material costs
31
(167)
(118.7)
(35)
(187.9)
Personnel costs
(564)
(775)
(27.2)
(646)
(12.7)
Other overheads
(753)
(633)
18.9
(586)
28.4
Operating profit
1,634
1,094
49.4
1,368
19.5
OPM (%)
56.0
41.0
1498 bps
51.9
407 bps
Depreciation
(95)
(89)
7.0
(90)
6.0
Other income
700
602
16.3
1,135
(38.3)
PBT
2,239
1,607
39.4
2,413
(7.2)
Tax
(745)
(506)
47.4
(837)
(10.9)
Effective tax rate (%)
33.3
31.5

34.7

Adjusted PAT
1,494
1,101
35.7
1,576
(5.2)
Adj. PAT margin (%)
51.1
41.3
989 bps
59.8
-865 bps
Reported PAT
1,494
1,101
35.7
1,576
(5.2)
EPS (Rs)
35.6
26.2
35.7
37.5
(5.2)
Source: Company, India Infoline Research

Strong volumes boost topline

MOIL in Q4 FY14 registered a growth of 9.4% yoy and 10.8% qoq to Rs2.9bn, also higher than our estimate of Rs2.8bn. The outperformance in topline was largely led by strong manganese ore sales volume. The company managed to sell 0.34mn tons of ore during the quarter against our expectation of 0.3mn tons. However, this impact on topline was somewhat offset by lower realisations and lower sales of ferro manganese product. Blended realisations during the quarter were lower by 1.9% qoq to Rs8,681/ton, also lower than our expectations. The underperformance in blended realisations was largely due to lower sales of ferro manganese product. Net manganese ore realisations were higher by 5.7% qoq and 23.4% yoy. Share of lumps of total sales volume was higher on a qoq basis from 75.5% in Q3 FY14 to 77.7% in Q4 FY14. We believe realisations would continue to improve ov

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