Monday 24 November 2014

Investment Idea for MOIL


MOIL BSE: 533286 NSE: MOIL SECTOR: MINING/MINERALS

BUY

Short term Investors can BUY the Stock with an initial target of 340.

Good  Resistance at 340

Mild Resistance at 321(partial profits can be booked at this level)

Support levels are 272 / 260 / 210 / 180

Medium & Long term investors can aim at the levels above 410

Targets for Short term : 340 ,370, 386 
Targets for Medium Term, 401, 434, 
Targets for Longterm 500, 590 ,628

Fundamentals of MOIL (Source: The Hindu Business Line):
  • State-owned MOIL is  the largest domestic producer of manganese ore.
  • The company holds about 44 per cent of the country’s reserves of medium and high-grade ore. In 2013-14 MOIL produced  40 per cent of the local production. 
  • A recent report by the Indian Bureau of Mines projects manganese ore demand in 2020-21 to be over 9 mt and estimates local production at 5 mt. 
  • The company plans to double its output to 2 mt by 2020-21. It expects to produce 1.5 mt annually by 2016-17 by expanding its existing mines.
  •  MOIL has received licences to prospect around 600 hectares (11 blocks) near its existing mines in Maharashtra, to open around four new mines. 
  • It has also entered formed a joint venture with Steel Authority of India and Rashtriya Ispat Nigam to produce manganese alloys.
  • The company has a large cash balance of Rs. 2,792 crore (as on March 31, 2014) to comfortably fund its proposed expansion
  • One concern, however, is the fall in manganese prices.
  •  The company also pays dividend regularly. For 2013-14, it paid Rs. 7.5 per share, a dividend yield of 2.4 per cent at current prices


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