Sandur Manganese is involved in the mining of manganese ore and iron ore. The company carries out mining activity in 2,000 hectares in Bellary Region of Karnataka. The total reserves of iron ore are 50 million tonne and manganese ore is 25 million tonne. The company was a big exporter of iron ore to China and made big money in 2008 & 2009. The Reddy Brothers issue and the subsequent mining ban imposed affected the company very badly. It had to almost stop the mining activities. Recently the Karnataka High court lifted ban on mining by companies having Grade 'A' licence and Sandur got relief. This is evident from the september quarter results of the company. The company reported a sales of 80 Cr and a profit of 13 Cr compared to 30 Cr & 1.5 Cr in corresponding period last year. This year the company is expected to report an EPS of 50 Rs.
The marketcap at the current price of Rs 625 is about Rs 550 crore. It is a debt-free company. This gives more comfort. Given the recent happenings and issues like Coal Scam,the mining sector is expected to get more regulated for licences and companies like Sandur which already have Grade 'A' mining licences will be benefited
Even during the last 3 years when the iron and manganese ore prices were at bottom, the company reported profits. There was a time when the company reported 225 Cr profit in one year. The worst is behind the company. The mining activity has already started and any recovery in global iron ore & manganese ore prices will push Sandur Manganese back to its glory days.The market has already rewarded the Superb results of Sandur. The share price hit a 52 week high of 720 Rs/- last week and is now trading at 625 Rs. I feel that one can add this mining company into the portfolio in SIP mode for long term gains
Note:-I have vested interests in SANDUR MANGANESE and its safe to assume that i am holding it from lower levels
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