Winning Strokes

The domestic bourses are trading at a bullish tone. The BSE Sensex is seen trading at 59,210.73 up a whopping 956.91 points (+1.64%), while the Nifty was last trading at 17,630.90 up 276.85 points (+1.60%). The domestic bourses will continue to remain bullish in view of the optimism surrounding the upcoming union budget.

#The shares of Orissa Mineral Development Company Ltd (Rs.2374) recommended yesterday are doing fine, after the company commenced mining operations. The stock should at least double from the current market price.

Incidentally, in February, 2021, there were media reports that Cabinet had approved the privatisation of steel-maker Rashtriya Ispat Nigam Ltd (RINL), the "Navratna"  PSU which runs the 7.3 million tonne (mt) capacity Visakhapatnam Steel Plant. The government currently holds 100% stake in the company that makes long products used in construction. Incidentally, it is the parent company of Orissa Mineral Development Company Ltd (Rs.2370) since RINL runs two subsidiaries – The Orissa Minerals Development Company Ltd (OMDC) and The Bisra Stone Lime Company Ltd (BSLC).

In September, last year Orissa Minerals Development Company received Stage - II/Final approval of the Ministry of Environment, Forest & Climate Change for diversion of 21.52 hectares of forest land in Uliburu Reserve Forest (including 2.107 hectares of safety zone) for iron ore mining in Bagiaburu iron ore mines of the company in Keonjhar district, Odisha during 3rd RML period.

Financials: The company came out with strong set of numbers for the September, 2021 quarter, after the mining activities commenced. The total income of the company came as Rs.41.68 Cr in Q2FY22 as against Rs.2.76 Cr in the corresponding quarter previous year. 

The net profit of the company for the September, 2021 quarter came as Rs.16.97 Cr generating a Cash EPS of Rs.28.29, against a loss of Rs.17.35 crore and NEGATIVE EPS of Rs.28.92. The OPM for the September, 2021 quarter was also superb at 61.16% while the NPM was also good at 42.34%.

The mines of OMDC together have an estimated reserve of about 206 million tonnes of Iron Ore and 44 million tonnes of Manganese Ore. As per Indian Bureau of Mines (IBM) approval, OMDC was having annual production capacity of 2.20 million ton of Iron Ore and 0.1 million ton of Manganese Ore. Corporate plan of OMDC for 2012-22 envisages production of 10 million tons of Iron Ore and 1 million tons of Manganese Ore and 2 million ton per annum (MTPA) beneficiation and 2 MTPA pellet plant at Barbil, Odisha. 

Meanwhile, the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) has been amended through the Mines and Minerals (Development and Regulation) Amendment Act, 2021, which has been notified on 28.03.2021, for giving boost to mineral production, improving ease of doing business in the country and increasing contribution of mineral production to Gross Domestic Product (GDP). Some of the major reforms brought in the Amendment Act, 2021 are as under:

Removed the distinction between captive and merchant mines. It allows all captive mines to sell up to 50% of the minerals produced during the year after meeting the requirement of attached plant subject to the payment of additional amount as prescribed under sixth schedule of the MMDR Act. Further, all future auctions will be without any end use restrictions. Resolved all pending cases under section 10A (2) (b) of the Act. Statutory clearances to be valid even after expiry or termination of mining lease and shall be transferred to the successful bidder in the auction. To ensure ease of doing business, restriction on transfer of mineral concessions are removed and now mineral concession can be transferred without any transfer charge.

#Buy the shares of Industrial automation player Marshall Machines Ltd near Rs.39.40/39.45, for targets above Rs.100. The factory automation company had raised around Rs.16 cr via its IPO on the NSE SME exchange in late 2018, pricing each of its shares at Rs.42.00. 

The Punjab-based company had revenue of around Rs.65 Cr/year at the time of the IPO, thanks to clients like Havells, Hero, Amtek Auto and Usha from sectors such as auto, appliances, engineering, aerospace, electronics and medical equipment. 

Marshall Machines has a healthy order book of Rs.51 cr as of September end, from Rs.28 Cr a year ago. The CNC technology can be used for making #Electric #Vehicles too.

Marshall is a leader in smart, automated, robotic CNC Machines and Industry 4.0 technologies. The company is driven by R&D and Intellectual Property with several Patents in India and USA. Buy in all market dips.

Those who are holding my old recommendation, Genera Agri Corp Ltd can continue to hold with a target of Rs.11/12. 

#My recommended Oriental Trimex Ltd yesterday, near Rs.11, hit 20% buyer Freeze today. Congratulations to the shareholders.