be more than 200+ in this quarter alone . They have contracted Manganese
@38k per tonne . I am also attaching the OMDC june quarter results . If u
study it minutely u will see revenue from manganese ore is 14 crores and
profit is 12+ crores. So just imagine the profit in Sandur.*
- As interacted with the management of Sandur Manganese & Iron Ore
(SMIO), a pure mining play on iron ore and manganese ore. The company has
extractable reserves of 5mn tons of iron ore and 18mn tons of manganese ore
in Sandur area of Bellary District of Karnataka. SMIO is one of the top 5
manganese ore producers in the country. SMIO exports 50% of its output to
steel and ferro alloys producers in Japan and China.
- SMIO has extractable reserves of 5mn tons of iron ore (Fe~50%, low
grade) and 18mn tons of manganese ore (Mn-28-45%, medium grade) in Sandur
area of Bellary District of Karnataka.
- According to the management, out of the 2.2mn tons permissible mining
output, iron ore and manganese ore would respectively constitute 85% and 15% of the total.
- SMIO has recently contracted iron ore (Fe-~50%) at $80/ton while Mn ore
(45%) grade ore was contracted at Rs38,000/ton for Q2FY09. If we take into
consideration management's guidance on the production front and incorporate
current ruling prices of both the ores, then we believe management's
guidance on the financial front for FY09 can be easily surpassed.
-
Company have started the process of dematerialisation of shares and it
will take anaother 3 months and anyways 90 % stake is with promoters ( out
of which 15 % has been issued to banks after ots settlement in 2006)
*Buy sandur Manganese bse code 504918 @1260 it will touch 15000 in 2 years
...its PAT will be 600 crores on an equity base of Rs 8.75 crores ie EPS of
Rs 700 + will touch 3500 in this year only .... almost no flaoting stock
..promoters and instituitions holding is 90 % ..next year EPS will be 1100+
.... major mining story in manganese and iron ore .... major demand from
china a and indian ferro alloy companies .. extracts mangaese ore @1200 per
tonne and sells the same at Rs 15000/- per tonne imagine the profit ........
company MD in his interview to cnbc has confirmed profit of 600 in this year
..so eps of 700+ will be there ...... *
**
**
**
*Sandur Manganese eyes rev of Rs 1.2K cr if prices rise
*
**Analysts are now talking about another scarce raw materials as the next
big thing. One of the talked about minerals is manganese ore. Globally,
prices of manganese ore have risen sharply in the last 12 months.
Nazim Shiekh, Executive Director, Sandur Manganese & Iron
Ores<http://www.moneycontrol.com/india/stockpricequote/miningminerals/sand...>,
expect to make a turnover and profits of about Rs 1,200 crore and Rs 600
crore respectively in FY09, if manganese ore prices continue to rise. "Of
that, Rs 300 crore will be from manganese ore even though the production is
just 15% of the total ore production."
The company recorded a PAT of Rs 57 crore as against a similar loss in the
previous fiscal.
*
Excerpts from CNBC-TV18's exclusive interview with Nazim Shiekh:
**
Q: Is the sharp rise in manganese ore prices the single biggest reason why
you could turn from a loss making to a profit making company? Are you a
direct beneficiary of higher manganese prices?
*
A: We have experienced higher manganese ore prices only in the last couple
of months. However, iron ore saw much better performance in 2007-08.
*
Q: What about buyer industries who are the major consumers of your products?
*
A: Manganese ore is basically consumed by the ferro-alloy industry in India.
We do export maybe 60% of our production to China and Japan.
*
Q: Do you see the trend continuing and if that is the case, how much
contribution would manganese ore make to your topline and bottomline going
forward?
*
A: We do expect manganese ore to remain like this for at least this year.
Manganese ore is only about 15% of our total production. We mine about 2
million tonne of iron ore. Of this only about 3,000 tonne is of manganese
ore and 15, 00,000 to 17, 00, 000 tonne is iron ore.
But manganese ore prices have shot up. If we go by what has happened in the
last couple of months, we expect manganese ore, even with just 15%
production, to match the profitability of iron ore. For FY09, we expect to
make a turnover of about Rs 1,200 crore and expect the profitability to be
about Rs 600 crore. Of that, Rs 300 crore will be from manganese ore even
though the production is just 15% of the total ore production.
*
Q: What about the final user industry, you said ferro-alloy companies buy
manganese ore, who is the final user industries that will have to pay this
higher price?
*
A: The steel industry<http://www.moneycontrol.com/india/news/interviews/sandur-manganese-ey...>which
buys ferro-alloys.
A MINE OF PROFITS
SANDUR MANGANESE INDUSTRIES LTD.
*(Rs 842/)*
In last 1 year or so, we have been extremely bullish on mining industry
because demand for Ores of different kinds is rising rapidly whereas
availability has not increased proportionately, leading to huge surge in Ore
prices. Our earlier recommendations like FACOR Alloys, Ferro Alloys, NMDC,
GMDC etc have reported very good profits and scrips are providing decent
return to investors who bought on our advice. Ore prices have increased
further in last 2 months which means that mining companies are set to report
bumper profits in 08-09.
SMIL ,Karnataka based company engaged in mining of Iron Ores and Manganese
Ores, is being recommended now as company is poised to report unbelievably
high nos in 08-09 and onwards. Scrip is in Z group and physical mode.
However, it is likely to be Dmat in coming 3-6 months maximum. Promoters
stake is 74.8%.
SMIL has its mining spread over 1700 acres in Sandur area. These must be one
of the biggest mines in India.Earlier in 06-07, company had hardly any
operations as it was referred to BIFR with heavy carry forward losses. Last
year, company had completed the OTS and cleared its pending liabilities
towards forest department which enabled it to resume mining operations
smoothly. Simultaneously, mineral prices have zoomed. In a way, closure of
its mines temporarily have proved a blessing in disguise as now, company is
able to sell its products at much much higher prices. Market value (at
today's prices) of its mine reserves are estimated at over Rs 40,000 crs as
against current market cap of just 800 crs.
*FINANCIAL PERFORMANCE:*
*Q4 07-08*
*Q3 07-08*
*Rs Cr*
*Rs Cr*
*Sales*
112.00
88.87
*PAT*
38.39
46.76
*Equity*
8.75
8.75
In Q4, company has paid income tax of 22 crs as against NIL in Q3.
Thus, in H2 07-08, Company has achived EPS of nearly Rs 97.
*FUTURE OUTLOOK:* Since July 07, prices of Manganese ore have risen nearly
300% and Ore prices have nearly doubled. MSIL had, in 07-08, done mining
mainly of Iron Ore. Manganese Ore prices have nearly doubled in last 2-3
months. Now, company wants to do manganese ore mining also in a big way to
avail of sky-rocketing prices. Actually, 15% quantity (against 100% quantity
of Iron ore) of Manganese ore will fetch same profits to the company because
mining/digging costs are almost same whether you dig iron ore or manganese
ore but prevailing prices of manganese ore 30 grade are Rs 14000/ per tonne
as against iron ore prices of around Rs 4000-4500 per tonne. In 08-09,
company has scaled up mining activities to achieve higher production:
*08-09E*
*Sales*
1150.00 Crs
*PAT*
510.00 Crs
*Equity*
8.75 crs
*EPS Rs*
583
Yes, company is poised to report EPS of Rs 583/ in 08-09. SMIL can report
even higher profits for 09-10 onwards as mineral prices are expected to
remain firm and even rise further for next 2-3 years at least. ,Scrip is
trading at just 1.50 PE Ratio. Floating stock is very low. Actually, some
banks are holding 2 or 3 lakh shares maximum which are getting sold
everyday. Once, this finishes, scrip will be in hands of strong investors
and share price can continue to rise sharply. Once, scrip goes Dmat, scrip
will be rerated as majority of brokers(corporate brokers at least) dont
allow buying of physical shares. Even, all investors will be tempted to buy
this scrip in dmat form.
levels as share price can reach levels of Rs 3000-4500/(depending on Sensex
levels) in less than 15 months. It can be A SOLID BUY for short term period.
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