Sunday, December 13, 2015

MOIL - Value buy?

The company Manganese Ore India Limited was established in year 1896 in UK but it became an Indian company in year 1962.

The average ROCE of the company over the last ten years is 28.77% but is lower at 13.82% in the last three years. The company has consistently paid dividends over the last ten years. The company has net current assets to the tune of INR 3030 Crore.

It is a government owned company and 80% is owned by government.

At the current market price of INR 200, the company's market cap is INR 3370 Crore which is just 10% above its net current assets. The price earnings ratio is less than 10 at severely depressed commodity prices. Dividend is almost 4.2% if it continues at the current rate. The IPO of the company concluded in year 2010 with a share price of INR 375 and the listing happened at INR 551. The current price of 200 is almost half of IPO price and 60% lower than all time high in year 2010. Need to see if it turns out to be a value buy or value trap.
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1 comment:

KKR said...

ofcourse it is another value trap. because
1. PSU ( so arm twisting chances)
2. Divestment overhang time to time
3. Commodity cycle

if it is an private or free from PSU tag, then it might get rerating. Pl share your thoughts.

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