MOIL shares jump 7% on 'best November performance'; brokerage sees more upside

MOIL shares surged 7.22 per cent in Tuesday's trade to hit a high of Rs 342.30. The stock was last seen trading 6.64 per cent higher at Rs 340.45. At this price, it has climbed 8.60 per cent in the calendar year 2024 so far.

Today's sharp upmove in the share price came after the state-run firm achieved its best November performance. MOIL said it has recorded production of 1.63 lakh tonnes of manganese ore in November, 2024, which is the best November performance since inception.

"During first eight months of FY25, the company has recorded production of 11.80 lakh tonnes, which is higher by 8.46 per cent over corresponding period last year (CPLY). On the sales front also, the company has achieved best ever November sales of 1.33 lakh tonnes, higher by 32 per cent over CPLY. During first eight months of FY25, the company has registered sales of 9.90 lakh tonnes, which is higher by 4.76 per cent over CPLY. The company has surpassed a turnover of Rs 1,000 crore within 8 months of FY25, achieving this milestone over a month earlier than last year," it stated.

Continuing utmost thrust to exploration, MOIL also said that it has carried out exploratory core drilling of 63,654 meters during April-November, 2024, which is 1.28 times over CPLY.

Ajit Kumar Saxena, CMD at MOIL, said it is heartening that the company has continued the momentum of upward performance both in production and sales. He further added that MOIL team is geared up to register yet another successful financial year.

"MOIL is strategically positioned to capitalise on the growing demand for manganese ore in India, driven by the National Steel Policy's target of producing 300 million tonnes of steel by 2030, which will require approximately 11 million tonnes of manganese ore. The company aims to produce 3.5 million tonnes by 2030, increasing its market share from 20 per cent to 32 per cent," BP Wealth stated.

"Despite holding only 21 per cent of the country's manganese reserves, MOIL meets 52 per cent of India's manganese production demand, demonstrating its leadership in the sector. Its strength lies in its extended leases beyond the next decade, some valid until 2032 and others until 2042," the brokerage added.

MOIL aims to transition to 100 per cent renewable energy by 2030.

"With manganese ore prices near long-term averages and an expected growth in volumes going ahead, the financial performance trajectory looks promising. We give the stock a 'Buy' rating based on the above factors. On the valuation front, we value the company based on 13x of FY25e earnings and arrived at a target price of Rs 376 with a 12-month investment horizon," BP Wealth further stated.

MOIL, a Miniratna company established in 1962 as Manganese Ore (India) Ltd, is the largest manganese ore producer in India.