MOIL - MOIL Limited Share Price

Management Outlook and Major Points:

Outlook:
MOIL targets contributing 32% of India's manganese ore requirement by 2030 (vs. ~21% currently), aligning with India's steel production goal of 300 million tons under the National Steel Policy. Production is projected to rise to 3.5 million tons by 2030 (from ~1.75 million tons in FY24), driven by organic expansion and new ventures. Short-term, FY25 production is expected to grow 14-15% YoY.

Key Initiatives:

1. Expansion: Focus on brownfield upgrades (modernizing mines, shaft sinking) and greenfield projects. Joint ventures in Gujarat (GMDC), Chhattisgarh (Nilkanthpur block), and Madhya Pradesh aim to unlock new reserves.
2. Exploration: Aggressive drilling (target: 100,000 meters in FY25) to convert resources to reserves. Recent exploration added 7.98 million tons of resources in FY24.
3. Environmental Clearances (ECs): Targeting ECs for 5 million tons by 2030 to enable scaling. Applied for 10 lakh tons in FY25.
4. Cost Efficiency: Mechanization and renewable energy (60% current usage) to reduce costs. Capex of Rs.316 crore in FY24, exceeding PAT, with similar plans ahead.
5. Market Growth: Leveraging India's steel sector boom and import substitution (currently ~5.6 million tons imported annually).

Risks Mitigated:

• Supreme Court ruling on state taxes deemed low impact.
• Grades and pricing aligned with global trends; domestic demand remains robust.

Financials:

• Record FY24: Production (+35% YoY), sales (+30%), turnover (Rs.1,449 crore, +8%).
• Q1 FY25: Revenue up 30% YoY (Rs.492 crore), sales volume +15%.

Synopsis: MOIL is positioned for sustained growth via exploration, partnerships, and operational efficiency, capitalizing on India's steel-driven manganese demand.

Question 1:
"In the vision 2030, you have given a conservative target of raising production to 3.5 million tons. Can MOIL achieve 5 million tons?"
Answer:
The 3.5 million ton target is based on existing mines and controlled resources. Achieving 5 million tons would require new mines, which are under exploration (e.g., JVs in Gujarat, Chhattisgarh, and MP). Current plans focus on expanding EC limits, mechanization, and exploration to support growth.

Question 2:
"What is MOIL's strategy to reduce dependency on manganese ore imports (5.6 million tons)?"
Answer:
MOIL aims to increase domestic production through exploration, brownfield/greenfield expansions, and JVs. Challenges include logistical costs and specific grade shortages. Import substitution depends on competitive pricing, grade availability, and proximity to ferroalloy hubs.

Question 3:
"How will the Supreme Court ruling on state mining taxes impact MOIL?"
Answer:
No significant liability is expected, as MOIL's operations in Maharashtra and MP are unaffected. The ruling primarily impacts royalties, which MOIL already complies with. Cost optimization efforts mitigate risks.

Question 4:
"What drives the production ramp-up to 2.49 million tons in FY25, and will growth be linear?"
Answer:
Growth is driven by increased EC limits (applying for 10 lakh tons in FY25), mechanization, and shaft projects. A 12% CAGR is targeted, with variability due to clearance timelines. Q1 FY25 saw 4.53 lakh tons sold (+15% YoY).

Question 5:
"What is MOIL's cost of production per ton, and how will it trend?"
Answer:
Costs are reducing ~6-7% annually due to higher volumes, operational efficiency, and mechanization. Employee costs (INR550 crore in FY24) are stable post FY23 pay revisions; next reset is expected in 2027.

Question 6:
"Why did Q1 FY25 realizations grow 14% vs. announced 30% price hikes?"
Answer:
Blended realizations depend on grade mix and dispatch patterns. Price hikes apply to specific grades, while overall realizations are tempered by grade-wise demand and sales distribution.

Question 7:
"What are MOIL's plans for global expansion and critical minerals?"
Answer:
MOIL is exploring opportunities in new geographies and minerals (e.g., seabed mining) but prioritizes domestic manganese expansion. Global ventures require economic viability and government partnerships.

Question 8:
"What is the capex plan for FY25 and beyond?"
Answer:
FY25 capex is INR328 crore (rising to ~INR340 crore in FY26), focused on shaft projects, mechanization, and JV exploration. No bifurcation between modernization and new projects was provided.

Question 9:
"How will employee costs trend amid production growth?"
Answer:
Costs are managed via redeployment, attrition, and productivity gains. FY24 saw lower costs post FY23 wage revisions. Incremental hiring is minimal due to mechanization.

Question 10:
"What reserve additions were made in FY24?"
Answer:
FY24 added 7.98 million tons of manganese resources via exploration. Reserves are converted progressively based on economic viability, with ongoing efforts to expand EC limits.