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India Equity Research Reports, IPO and Stock News
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MOIL’s operational performance in the Dec11 quarter was lower than
estimates due to 7.3% decline in realizations and increase in other
expenditure. Other expenditure increased by 45.9% q‐o‐q to
INR481.9mn. Net profit increased by 0.5% q‐o‐q to INR1bn (against our
estimates of INR1.3bn). We lower our net profit forecast for FY12‐FY14
by up to 22.3% as we cut our realization estimates by 12.5% and raise
other expenditure by up to 10.0%. We lower our target to INR249,
after a rollover to Dec12 and downgrade rating on the stock to Reduce
due to 25.5% increase in stock price since Dec11.
Net sales declined by 3.5% q‐o‐q to INR2.4bn due to lower realizations
Net sales declined by 3.5% q‐o‐q to INR2.4bn (against our estimate of
INR2.7bn) due to 2.3% decline in manganese ore sales and 7.3% decline in sales
of electro manganese oxide. The decline in sales of manganese ore is due to
7.3% decline in realizations due to sales of low grade manganese ore and fines.
Sales volume increased by 5.4% q‐o‐q to 285,500 tonnes. Downward revision of
prices starting Jan12 for various grades of manganese ore has led us to lower
our realization estimate for FY12f‐FY14f by up to 12.5%. Our revenue estimates
for FY12f – FY13f are lowered by up to 13.2%.
EBITDA declined by 1.5% q‐o‐q to INR1.1bn
EBITDA declined by 1.5% q‐o‐q to INR1.1bn due to higher other expenditure.
Other expenditure increased 45.9% q‐o‐q to INR482mn. Royalty and cess
payment declined by 2.3% q‐o‐q with lower revenues. Staff cost declined by
7.4% q‐o‐q to INR567.2mn. We raise our estimates for other expenditure for
FY12f – FY14f by up to 10% to account for the increase in cost during 3QFY12.
This along with the decline in revenue estimates has led us to cut our FY12f –
FY14f EBITDA by up to 31.6%.
Net profit up 0.5% q‐o‐q due to higher other income
Net profit increased 0.5% q‐o‐q to INR1bn (against our estimate of INR1.3bn)
due to higher other income. Other income increased 5.3% q‐o‐q to INR498mn
due to increase in cash and cash equivalents and higher yield on investments.
Depreciation provisioning increased q‐o‐q by 1.3% to INR72.8mn. Tax/PBT of
33.2% was in line with estimates. We estimate cash and cash equivalents of
INR128/share as on Mar12.
Cut net profit forecast by up to 22.3%; Downgrade to Reduce
We cut our net profit forecast for FY12‐FY14 by up to 22.3% as we lower our
realization estimates by 12.5% to account for the downward revision in prices
with effect from Jan12 and raise other expenditure by up to 10.0%. We lower
our target price to INR249, after a rollover to Dec12, as we discount the
historical average (Dec10 – Feb12) EV/EBITDA and P/E by 30% to reflect the
commodity cycle of the manganese ore business. The 25.5% increase in stock
price since beginning Dec11 has led us to downgrade our rating on the stock to
Reduce. Risk factors include an increase in international manganese ore prices
and higher than estimated volumes.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
MOIL’s operational performance in the Dec11 quarter was lower than
estimates due to 7.3% decline in realizations and increase in other
expenditure. Other expenditure increased by 45.9% q‐o‐q to
INR481.9mn. Net profit increased by 0.5% q‐o‐q to INR1bn (against our
estimates of INR1.3bn). We lower our net profit forecast for FY12‐FY14
by up to 22.3% as we cut our realization estimates by 12.5% and raise
other expenditure by up to 10.0%. We lower our target to INR249,
after a rollover to Dec12 and downgrade rating on the stock to Reduce
due to 25.5% increase in stock price since Dec11.
Net sales declined by 3.5% q‐o‐q to INR2.4bn due to lower realizations
Net sales declined by 3.5% q‐o‐q to INR2.4bn (against our estimate of
INR2.7bn) due to 2.3% decline in manganese ore sales and 7.3% decline in sales
of electro manganese oxide. The decline in sales of manganese ore is due to
7.3% decline in realizations due to sales of low grade manganese ore and fines.
Sales volume increased by 5.4% q‐o‐q to 285,500 tonnes. Downward revision of
prices starting Jan12 for various grades of manganese ore has led us to lower
our realization estimate for FY12f‐FY14f by up to 12.5%. Our revenue estimates
for FY12f – FY13f are lowered by up to 13.2%.
EBITDA declined by 1.5% q‐o‐q to INR1.1bn
EBITDA declined by 1.5% q‐o‐q to INR1.1bn due to higher other expenditure.
Other expenditure increased 45.9% q‐o‐q to INR482mn. Royalty and cess
payment declined by 2.3% q‐o‐q with lower revenues. Staff cost declined by
7.4% q‐o‐q to INR567.2mn. We raise our estimates for other expenditure for
FY12f – FY14f by up to 10% to account for the increase in cost during 3QFY12.
This along with the decline in revenue estimates has led us to cut our FY12f –
FY14f EBITDA by up to 31.6%.
Net profit up 0.5% q‐o‐q due to higher other income
Net profit increased 0.5% q‐o‐q to INR1bn (against our estimate of INR1.3bn)
due to higher other income. Other income increased 5.3% q‐o‐q to INR498mn
due to increase in cash and cash equivalents and higher yield on investments.
Depreciation provisioning increased q‐o‐q by 1.3% to INR72.8mn. Tax/PBT of
33.2% was in line with estimates. We estimate cash and cash equivalents of
INR128/share as on Mar12.
Cut net profit forecast by up to 22.3%; Downgrade to Reduce
We cut our net profit forecast for FY12‐FY14 by up to 22.3% as we lower our
realization estimates by 12.5% to account for the downward revision in prices
with effect from Jan12 and raise other expenditure by up to 10.0%. We lower
our target price to INR249, after a rollover to Dec12, as we discount the
historical average (Dec10 – Feb12) EV/EBITDA and P/E by 30% to reflect the
commodity cycle of the manganese ore business. The 25.5% increase in stock
price since beginning Dec11 has led us to downgrade our rating on the stock to
Reduce. Risk factors include an increase in international manganese ore prices
and higher than estimated volumes.
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