Sandur Mang

Sandur Manganese was extremely volatile yesterday, intra day it rose almost 3% and then dipped down around 3%.  At 503, it is back to the levels it was a month ago.

The brief spike up in the stock price happened that the Hon’ble High Court of Karnataka has quashed the levy of Forest Development Tax (FDT) imposed on mining lease holders. Earlier, the State Government had amended the provisions for levying FDT with effect from August 27, 2008. The matter was contested by Sandur and other mining lease holders before the High Court, which ruled the levy shall be applicable only on State Government-owned companies and not others. Thus for now, this cloud of FDT is gone from over the company.

Once this news was discounted, the stock price slumped as its financials indicate that it needs more than this court order to get back on its feet. The poor performance of metal industry, lower iron ore prices and overall slump in the sector has left a telling effect in the Q2FY16 performance. Net sales was down 35% (YoY) at Rs.52 crore. The company actually posted a loss before other income, interest, tax and depreciation. But thanks to the other income of Rs.1 crore, it came into the black. Tax outgo was down from Rs.6 crore to Rs.25 lakh. Net profit came in at Rs.67 lakh, a decline of 95%.

The company has two segments – mining and ferro alloys. Mining topline showed a 20% fall and its EBIT was down 60%. Ferro alloys was worse off – its topline declined 56% and it showed a loss of Rs.6 crore at EBIT level.