MOIL : Target 350*** * ::Anand Rathi

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MOIL                                                   CMP
254
                                                              Target 350***
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*Company Description*

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Manganese Ore (India) is into the exploration, development, production and
sale of manganese ore in India, operating 10 mines, six in Nagpur and
Bhandara districts (Maharashtra) and four in Balaghat district (Madhya
Pradesh). It markets various grades of manganese ores, electrolytic
manganese dioxide and ferro manganese. It sells manganese dioxide for the
dry-battery industry, as well as manganese oxide as a micro-nutrient for
cattle feed and fertilizers. It also operates a wind energy farm with an
installed capacity of 4.8 MW at Nagda Hills; and a 15.2-MW wind farm at
Ratedi Hills in Dewas district (Madhya Pradesh). Formerly known as
Manganese Ore (India), the name was changed to MOIL Ltd. in August 2010. It
was founded in 1896 and is based in Nagpur, India.****


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*~ Strong resource base*

*~ Steel production is key to demand for manganese ore *

*~ Expansion will help bottom line*

*~ Lowest cost producer*

*~ Cash cushion protects against downside risk*

*~ Valuation*

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*Valuation***

At the current market price, the stock quotes at a P/BV of 2 times in spite
of huge cash in the book. While the median P/BV of the mining industry
across the globe is around 2.80 most of the global counterpart are highly
leveraged companies. In terms of EV/EBIDTA MOIL looks undervalued. We
believe it is one of the gems in the mining sector with a high RoE, zero
debt and strong reserves, which provide visibility over 20 years. We
strongly believe that the stock is ready for re-rating in the near future
and we see a price target of Rs.350 in the next two years.****

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