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Systematix Research Report
MOIL Ltd.'s Q1 FY24 reported net sales at Rs 3.8 billion +1%/-11% YoY/QoQ (14% above estimate). Adjusted Ebitda for the quarter was Rs 1.2 billion -16%/-7% YoY/QoQ (16% above estimate).
Blended realisation at Rs 9,161/tonne was lower by 24% YoY but rose 5.3% QoQ; 9% above our estimate. Sales volumes at 0.4 million tonne +40%/+1.3% YoY/QoQ were in line with estimate.
Ebitda/tonne reported at Rs 3,124/tonne -40%/-8% YoY/QoQ was 16% above our estimate. Segment revenue from power sales was reported at Rs 59 million which fell 23% YoY but increased 46% QoQ.
MOIL has also registered the highest production of electrolytic manganese dioxide during the quarter. EMD is a 100% import substitution product, used mostly for batteries and pharmaceuticals manufacturing.
MOIL's manganese ore pricing is linked to international landed prices and tracks global cues which largely stayed negative for much of the quarter. Despite adverse market conditions witnessing a reduction of around 40% in international manganese ore prices, MOIL's Q1 FY24 earnings were boosted by higher volumes.
We cut our FY24 Ebitda estimate by 4% largely driven by weaker than expected pricing partially offset by higher volumes. We revise our FY25 Ebitda estimate marginally higher by 1% and value MOIL at five times FY25E Ebitda (four times FY25E earlier) to arrive at a revised target price of Rs 238/share (Rs 201 earlier).
It currently trades at 4.1 times FY25E enterprise value/Ebitda. Maintain 'Buy'.
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