Maithan Alloys

Maithan Alloys, an exporter of manganese ore is showing a lot of activity today. Hitting the 20% upper circuit at Rs.250.90, a new 52-week high, the stock is making eye brows rise and making investors sit up and take notice.

Despite manganese ore prices hitting new lows and most companies posting losses, this company has managed to do very well by improving operating efficiencies, concentrating on making niche low carbon/low phosphorus grades. It also did the smart thing by being asset light – instead of owning a mine, it bought ore from various mines , negotiating the best terms. Most importantly, it is very easy for such manufacturers to trade in ore but Maithan diligently kept away and thus saved itself from losses. The another good thing Maithan did was buy power off the grid rather than have its own captive power unit – it owns only one such unit as a backup. These prudent steps have apparently helped and the company is on a strong footing, financially.

For Q4FY16, the company posted a 150% (YOY) rise in net sales at Rs.515 crore and operating profit jumped up 8 times to Rs.62 crore. It ended the quarter with a net profit at Rs.46 crore v/s Rs.10 crore in previous Q4.

The company ended Fy16 with a consolidated net sales of Rs.1140 crore, up 4% and net profit of Rs.79 crore, up 49%. EPS on the doubled equity of Rs.29.11 crore (1:1 bonus was declared during the year), is at Rs.27 (FV Rs.10).