About the Company:
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65 Year old company
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Y.R. Ghorpade, the former Maharaja of Sandur, after he merged the Sandur State with Union of India, was awarded a mining lease over an area of 7500 ha. It was he, who founded the Sandur Manganese & Iron Ores Limited (SMIORE) and the lease was transferred to the company. Out of this, 2800 ha of area, which was largely iron ore bearing, was deleted when our lease was renewed in 1974 and retained by the Government. During the second renewal, the company voluntarily surrendered another 1500 ha of forest area for land preservation. Finally the lease was renewed over an area of 3200 ha with effect from 1st January 1994.
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With a view to ensure better protection and development of the forested land, Founder Y.R. Ghorpade, magnanimously gifted about 1600 ha of his personal property in 1980. Out of the 3200 ha, we work on 2005 ha, keeping the balance 1200 ha reserved for future use.
Let’s look at some of their past nos
Then the mining crisis happened
One of the few honest company in mining
Only Mining Lessee to have been awarded 5 Star rating in the state of Karnataka and one of 3 in the Country to have got 5 Star rating
SC allowed category A mines to operate with a cap on production. This cap is being relaxed gradually.
Why it could be interesting now?
Financials - https://www.screener.in/company/504918/
To Summarize:
- At Mcap of 700 Cr
- Stock trading at 5 PE
- Profits for last 3 years - 56 Cr, 107 Cr, 142 Cr
- Business generates high margins and free cash flows. Co is debt free with cash on balance sheet
- Optionality of substantial increase in operations
- Expansion of 400-500 Cr underway - co investing into Coke Oven plan, ferro alloys etc as forward integration
Negatives:
- Highly volatile commodity
- Regulated by Govt. Strange rules in Karnataka
- Major expansion into steel in coming years
Disclosure:
I am a SEBI registered RA and founder of www.intelsense.in. I have no current investments in this stock, neither have I recommended it to my members. However, I may do so in the future. Please do your own due diligence before deciding to invest. This post is for educational purposes only.
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