Rs 3.5 Per Share Dividend, 1.26% Yield: Miniratna MOIL Share Falls 13% In 5 Days; Buy-On-Dips Opportunity?

Miniratna, Manganese Ore (India) Limited aka MOIL share price has taken a massive hit in the past five trading sessions, nosediving by nearly 13% on BSE. The stock price is currently at Rs 294 apiece, down by 3% on Thursday. This is despite the smallcap turning ex-dividend for its upcoming payout to the tune of 35%. However, there is a buying-on-dips opportunity in MOIL shares as the consensus of analysts expects a 17% potential upside from current price levels.

MOIL declared an interim dividend of Rs 3.5 per share of face value Rs.10 each for the financial year ending on 31st March 2024. The company turned ex-dividend on February 10, which is also its record date to determine eligible shareholders. The date of payment of the interim dividend is set for February 29, 2024.

MOIL share price ranged from Rs 304.55 apiece to Rs 292.85 on Thursday before ending at Rs 294 apiece, down by 2.8% on BSE with a market cap of Rs 5,982.47 crore.

Last week, on Friday, MOIL shares were nearly Rs 325 apiece. The current week's trading session has been broadly bearish for MOIL except for a 5% upside on February 14th, or else the quantum of drop in 5 days would have been much broader in scale. Nevertheless, MOIL shares are currently down by 12.7% on BSE.

Its dividend yield is at 1.26% on the current price level. In FY23, MOIL paid dividends up to 36.90% amounting to Rs 3.69 per share.

In Q3FY24, MOIL reported a net profit of Rs 54.09 crore, higher than the PAT of Rs 39.51 crore in Q3FY23, but lower from Rs 61.51 crore in Q2FY24. Revenue also saw mixed performance, coming at Rs 306.30 crore, up compared to revenue of Rs 302 crore in Q3FY23 but down against Rs 347.52 crore in Q2FY24.

Hence, sequentially, MOIL's earnings were under pressure.

Buy On DIPS!

The average target price on MOIL shares is Rs 345 apiece, indicating a potential upside of 17% in a year, as per Trendlyne data. The consensus recommendation from 2 analysts for MOIL Ltd. is BUY. EPS is expected to grow by 26.5% in FY24.

MOIL's fundamentals are also healthy. The price to price-to-earning ratio is 21.13, lower than its sector PE ratio of 33.43, while the Return on Equity(ROE) for the last financial year was 11.16%, which is in the normal range of 10% to 20%. The company's Debt to Equity Ratio is zero as it is debt-free. Moreover, the stock price rose 89.86% and outperformed its sector by 7.34% in the past year, as per Trendlyne.

MOIL is a Schedule "A" Miniratna Category-I Company. It was originally incorporated as Manganese Ore (India) Limited in the year 1962. Subsequently, the name of the Company was changed from Manganese Ore (India) Limited to MOIL Limited during the financial year 2010-11.

At present, MOIL operates its underground and opencast mines located in the Nagpur and Bhandara districts of Maharashtra and Balaghat districts of Madhya Pradesh. All these mines are about a century old. The Balaghat Mine is the largest mine of the Company. The mine has now reached a mining depth of about 435 meters from the surface. Dongri Buzurg Mine located in the Bhandara district of Maharashtra is an opencast mine that produces manganese dioxide ore used by the dry battery industry. This ore in the form of manganous oxide is used as a micro-nutrient for cattle feed and fertilizers.

MOIL fulfils about 46% of the total requirement of dioxide ore in India. At present, the annual production is around 1.3 million tonnes which is expected to grow in the coming years.