This PSU industrial minerals stock has zoomed over 100% since April

Shares of MOIL hit a new high of Rs 565.80, surging 9% on the BSE in Monday's intra-day trade amid heavy volumes

Shares of MOIL hit a new high of Rs 565.80, surging 9 per cent on the BSE in Monday's intraday trade, amid heavy volumes. Since April, the far in the financial year 2024-25 (FY25), the stock price of the industrial minerals' public sector undertaking (PSU) company has zoomed 104 per cent from a level of Rs 278.

At 02:49 PM, MOIL was trading 4.4 per cent higher at Rs 542.85 as compared to 0.08 per cent rise in the BSE  Sensex. The average trading volume on the counter jumped over three-fold with a combined 11.7 million shares having changed hands on the NSE and BSE.

MOIL, on June 3, said that the company scaled a new peak of 2.15 lakh tonnes monthly sales of manganese ore in May, 2024, surpassing the previous record of 1.83 lakh tonnes, set in December, 2019, and registering an impressive growth of 41 per cent over May, 2023.

Sales during April-May’24 were higher by 31.5 per cent as compared to the corresponding period last year. Helped by market conditions, the company has increased the prices of various grades by about 65 per cent in the current financial year i.e. FY25.

MOIL, being a mining company, is engaged in the exploration, extraction, and production of manganese ore, Manganese Ore, Electrolytic Manganese Dioxide, and Ferro Manganese.

The demand for manganese ore and ferro alloy products depends on the outlook of the steel industry which, in turn, is dependent on the growth of the overall economy. The use of manganese in steel is very less in terms of percentage; however, over 95 per cent of the world's production of manganese is utilised in steel making to increase strength of steel, abrasion resistance, harden ability, etc. Accordingly, the demand for manganese ore and ferro alloys would increase with production of steel going up.

With its current resource base of 101.39 million MT of manganese ore, MOIL is very well positioned to contribute to India's steel demand growth given its dominant position, medium to high grade ore reserves, centrally located mines and strong customer ties.

The Government is committed to attract investments in the Indian steel sector from both domestic and foreign sources to ensure easy availability of vital inputs and necessary infrastructure to achieve a projected production as per National Steel Policy. India has set a capacity target of 300 million tonnes of crude steel by 2030-31 which will create high demand for manganese ore. This will require about 11.00 million tonnes of manganese ore.