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MOIL
Our verdict on MOIL isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
Management reported that the cost of production at the factory gate was approximately INR 5,500 per ton in FY 2024-25 and is expected to reduce to around INR 5,300-5,400 (implied by '53 something') in the current year, aligning with the reduction target. (1 met across 1 tracked commitment)
“So if you take just same values, increase by 12%, 14%, 15%, you will get around 6%, 7% of reduction in production cost on year-to-year basis per ton.”
Management confirmed they explored approximately 1,07,000 meters in FY 2024-25, meeting the 1 lakh meter target. (1 met across 1 tracked commitment)
“We are targeting around 1 lakh metres to be explored and further we will add to our reserves and resources in the current financial year.”
The project is in an advanced stage with necessary approvals from DIPAM and NITI Aayog received; however, the JV agreement is still pending initiation following lease allocation by the Government of Gujarat. (1 in progress, 1 exceeded across 2 tracked commitments)
“Exploration is done and we are nearing the signing of joint venture with GMDC with having 51% shares with MOIL.”
The company achieved a production of 1.8 million tons (18.03 lakh tons) in FY 2024-25, which represents approximately 35% growth over the previous year's 1.3 million tons, significantly exceeding the 14-15% target. (1 exceeded, 2 met, 2 missed across 5 tracked commitments)
“This year we are targeting a growth of around 14%-15% over the last year.”
The project is still in the regulatory phase; the Government of Gujarat has forwarded the file to the Ministry of Mines for the issue of a mining lease. (1 in progress across 1 tracked commitment)
“Govt. of Gujarat forwarded file to Ministry of Mines for issue of Mining lease.”
See the full cited Management analysis of MOIL
How durable is the business?
MOIL is shifting from manual methods to high-speed shaft sinking and mechanization to handle deeper underground mining as 70% of production now comes from underground mines. (2 shifted, 3 expanding)
“Establish new beneficiation plants at various mines to upgrade low-grade ore, enhance product quality, and increase overall value realization.”
MOIL strengthened its dominant position, increasing its share of domestic manganese ore production to approximately 53% from the previously reported 50%. (3 expanding, 1 stable, 1 contracting)
“MOIL holds around 20% of the India's manganese resources, through which it meets the company's 50% demand.”
The company is shifting from a purely domestic focus to exploring export possibilities for low-grade ore, having already executed three shipments as a state trading enterprise. (1 shifted, 1 new)
“from June last year, we started exporting... we have already exported three shipments. So once that material moves out of the country, that makes room for our material to get consumed as such for blending.”
The company remains 100% focused on the domestic Indian market with no export revenue, serving as a key supplier to the domestic steel ecosystem. (1 stable)
“And MOIL primarily operates and focus within India. Our company contributes to explore ways to enhance its production through various possible exploration of reserves and resources.”
MOIL is India's largest producer of manganese ore, a critical mineral used primarily to make steel, controlling nearly half of India's domestic production through 10 mines.
“The largest Manganese Ore Producer of India with current production of around 2MTPA and Capacity of 3MTPA. 10 manganese mines in Madhya Pradesh and Maharashtra in both Underground and Opencast.”
See the full cited Business Model analysis of MOIL
Where does growth come from?
Sales of low-grade ore are accelerating significantly due to new export channels and the company's appointment as a state trading enterprise, with low-grade sales growth consistently hitting 50% annually. (1 accelerating across 1 signal)
“In fact, government had appointed MOIL as the state trading enterprise for all exports of manganese ore from the country... we have already exported three shipments.”
Exploration activity is accelerating significantly, with Q1 FY25 drilling already reaching 30,000 meters, putting the company on track to exceed its annual target of 100,000 meters. (4 accelerating across 4 signals)
“Increase in Mn resource base of MOIL by 16.07 million tonnes in FY24-25. ... 2024-25 1,07,530”
MOIL has accelerated its long-term production target from 3.0 million tons to 3.5 million tons by 2030, driven by a 35% YoY production jump in FY24. (3 accelerating, 1 new trend, 1 steady across 5 signals, 3 leading indicators)
“Total of around INR664 crores of investment is put into the shaft sinking projects so that our infrastructure can be improved and production targets can be achieved in the future.”
MOIL is targeting a massive import substitution opportunity as India currently imports ~50% of its manganese requirements (~5.6 million tons). (1 new trend across 1 signal)
“So we are very, very competitive in the Central region, and there is space to grow by another 1.5 million tons within the Central region for MOIL.”
MOIL is forming new partnerships (Joint Ventures) in states like Gujarat and Madhya Pradesh to open new mines and expand its geographic footprint within India. (+1 more signal)
“In the greenfield area, we have already in an advanced stage in two of our projects. One is GMDC, another is Bhudkum block... MOIL has already signed a draft JV agreement with Government of Maharashtra and Madhya Pradesh Steel Mining Corporation”
See the full cited Future Growth analysis of MOIL
What could break the thesis?
NSR risk remains high as average sales realization dropped 15% from INR 10,422 per MT to INR 8,849 per MT. Despite record production, the lower realization pressured margins. (2 intensifying, 3 easing, 2 high-severity)
“The profit before tax is around INR223 crores against INR362 crores... This is basically due to fall in the NSR, which is not controlled by MOIL. It is usually controlled by the demand of steel and LME”
The risk is STABLE. MOIL's future outlook is explicitly tied to the National Steel Policy 2017, targeting 300 million MT of steel production by 2030, which reinforces the high concentration risk to a single end-use sector. (2 stable, 1 high-severity)
“METALLURGICAL 95-96%... Manganese Ore, a key ingredient in steel making”
STABLE. Management confirmed the next big reset in employee costs is expected around 2027. Currently, costs are easing as the impact of past arrears from the 2020 pay revision has subsided. (1 stable, 3 high-severity)
“This year target we had revised to 23.5 lakhs not 25, okay. And we have come and we'll not be able to reach 23.5 lakhs this year. It will be lesser than that, it would be somewhere between 19 to 20, okay.”
Cost pressure is intensifying as 70% of mines are now underground, contributing to 65% of production. Manpower costs remain a major portion of the increasing cost trend. (2 intensifying, 1 emerging, 2 stable)
“the biggest portion of our cost of production is our manpower, which is almost around 48% something.”
The risk is INTENSIFYING as imports reached a 5-year high of 5.6 million MT in FY 23-24, even as MOIL increased its own production. This indicates strong competitive pressure from foreign ore. (1 intensifying, 4 stable)
“70% of country's demand is being met through imports... we keep the prices higher by about 5% to 6%.”
See the full cited Risk analysis of MOIL
Read the full thesis on MOIL
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