Published on 14/03/2017 12:43:23 PM | Source: Reliance Securities Ltd
Buy Moil Ltd For Target Rs.409.00 - Reliance Sec
STOCK IN FOCUS
* MOIL closed ~3% higher supported by 2.6x its two week average traded volume and outperforming the CNX Mid-cap index by ~4%
* The company recently announced a price cut for manganese ore by ~15%-25% for the current month. However, prior to this, the company increased prices for five consecutive months. Hence, even after adjusting for the downward revision of prices, average realisation depending upon the grade and types is yet up by ~40%-100% YoY.
* Further even after buyback, the company currently has net cash of Rs20bn on its books.
* Going forward, we expect strong cash flow generation to continue due to low capex. Net cash is slated to rise to Rs190/ share (~60% of current mkt cap) by FY18E
* We have a BUY recommendation on the stock with a Target Price of Rs409.
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