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Systematix Research Report
We return positive from the analyst meeting hosted by MOIL Ltd. to discuss key industry developments and its future growth plans. MOIL's current manganese ore capacity stands at 1.4 million tonnes per annum, and it contributes around 17% to India's requirement of 7.46 million tonne (FY23).
On average, MOIL has incurred an annual capex of ~Rs 1.7 billion over the FY20-FY23 period, estimated to grow to Rs 3 billion in FY24/FY25. MOIL plans to raise capacities by more than 75% to 2.5 million tonne by FY25-FY26 and further to 3.5 million tonne by the end of the decade, to be funded through internal accruals.
We cut our FY24E Ebitda by 11% as we factor in lower manganese ore prices (-7%) and introduce FY25 estimates. Manganese ore prices have remained weak largely driven by an oversupply in international markets.
We note that MOIL's track record with respect to meeting timelines and targets over the last several years has been patchy. There is optimism post the induction of Mr. Ajit Kumar Saxena as Chairman and Managing Director in December 2022 with respect to more seriousness over meeting targets.
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