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Moil Ltd: Good Performance Marred by Stock Adjustments - Views on News from Equitymaster
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  • Nov 24, 2016 - Moil Ltd: Good Performance Marred by Stock Adjustments

Moil Ltd: Good Performance Marred by Stock Adjustments
Nov 24, 2016

Moil Ltd has announced the second quarter results of financial year 2016-2017 (2QFY17). While the topline increased by 32.1% YoY, the bottomline declined by 14.6% YoY during the quarter.

Performance summary:
  • Income from operations increased by 32.1% YoY during 2QFY17. This is on the back of increased sales volume of Non-fines (2.8 Lakh Tonne in 2QFY17- an increase of 50% YoY) and fines (0.3 lakh tonne in 2QFY17-an increase of 42% YoY). Although, realisations remained depressed and stood at Rs 6158 per tonne this quarter for Non-fines(decline of 7% YoY) and Rs realisations of fines stood at Rs. 2005 per tonne this quarter (decline of 19% YoY).
  • Operating profit declined by 87.6% YoY and EBITDA Margin stood at 1.2% this quarter compared to 13.3% in 2QFY16. The company offloaded low grade ore inventory during the quarter, resulting in a rise in stock adjustment costs (Rs 5.1 billion), which is the primary reason behind the sharp fall in the EBITDA.
  • Exceptional items represent adjustment relating to write down value of inventory of finished goods below cost to net realisable value, as per accounting policy for stock of finished goods.
  • Other income declined during this quarter by 16.8%YoY.
  • On the back of decline in operating profit and other income, net profit declined by 14.6% YoY. This was partly offset by lesser tax outgo.

    Financial Snapshot
    (Rs m) 2QFY16 2QFY17 Change 1HFY16 1HFY17 Change
    Total Income 1,484 1,960 32.1% 3,346 3,818 14.1%
    Total Expenses 1,287 1,936 50.4% 2,327 3,452 48.3%
    Operating profit (EBITDA) 197 24 -87.6% 1,019 367 -64.0%
    Operating profit margin (%) 13.3% 1.2% 30.4% 9.6% -68.5%
    Other income 672 559 -16.8% 1,330 1,152 -13.3%
    Depreciation 127 128 0.9% 245 249 1.5%
    Profit before tax & exceptional items 742 455 -38.6% 2,103 1,270 -39.6%
    Exceptional Item 156 62
    Tax 256 196 -23.4% 71905% 44584% -38.0%
    Net Profit 486 415 -14.6% 1,384 886 -36.0%
    Net profit margin (%) 32.7% 21.2% 41.4% 23.2%
    No. of shares (m) 133
    Basic diluted earnings per share (Rs) ^ 9.2
    P/E ratio (x) * 36.7

    * On trailing 12 month basis

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