MOIL (Q3 FY14)

MOIL managed to register operationally inline performance. The outperformance in bottomline was on account of higher other income. A reversal of Rs440mn for provisions made earlier was included in other income. A higher than expected increase in realisations led to a marginal outperformance in topline. Topline for the quarter stood at Rs2.6bn, higher by 15.5% yoy and 16.2% qoq. The jump in topline was led by both, higher sales volume and higher realisations, on a yoy basis. Sales volume of 0.29mn tons was 2.7% higher on a yoy basis, but production was lower by 0.7% yoy to 0.31mn tons. Realisations improved 6.5% yoy and 3.5% qoq after the price hikes announced by the company at the start of the quarter. The improvement in realisations on a qoq basis was curtailed by higher share of fines of total sales volume.

Operating profit for the quarter jumped 19.1% yoy to Rs1.4bn, inline with our estimate. The impact of higher realisations was offset by increase in costs per ton. Costs increased 10% yoy due to higher diesel prices. EBIDTA/ton of manganese ore increased sharply from Rs3,304/ton in Q2 FY14 and Rs4,060/ton in Q3 FY13 to Rs4,708/ton in Q3 FY14.