Analysis: The Sandur Manganese & Iron Ores Limited

NSE:SANDUMA Mining/Minerals - Iron Ore Market cap: ₹9.6K cr

Growth thesis

Sandur Manganese & Iron Ores mines iron and manganese ore, produces ferroalloys, and operates a coke plant with waste-heat power generation. Key segments include 1.6 MTPA iron ore (expandable to 3.85 MTPA pending regulatory approval), 48 ktpa ferroalloys (expandable to 72 ktpa), and 0.4 MTPA coke with 30 MW power. Growth hinges on delayed environmental clearance (EC) for iron ore expansion, which could unlock 2.25 MTPA incremental output if approved. Phased steel plant plans (1 MTPA) and a pellet/beneficiation plant are contingent on ore-grade stability. Ferroalloy EBITDA margins could reach 20%+ with current pricing, while coke operations stabilized post-Jan-2021 commissioning. The critical execution risk is the EC approval timeline, which has slipped twice in two years, directly delaying capacity utilization and funding for downstream projects.

Why is The Sandur Manganese & Iron Ores Limited stock rising?

Phase 2 CAPEX plan to be announced within calendar year 2021 for integrated steel plant of 1 MTPA
Environmental clearance for iron ore production expansion from 1.6 MTPA to over 3.5 MTPA expected by end of calendar year 2021
Iron ore capacity expansion to be executed quickly using asset-light model with contractors once EC is obtained
Beneficiation facility or pellet plant planned to upgrade lower grade ore after capacity expansion
Ferroalloy capacity expansion from 48,000 TPA to 70,000 TPA via refurbishment of idle furnace and additional power sourcing

Research report

companyname: The Sandur Manganese & Iron Ores Limited ticker: SANDUMA sector: Mining and Metals (Iron ore, Manganese ore, Ferroalloys, Coke & Energy, Specialty Steel) The Sandur Manganese & Iron Ores Limited (SMIORE) is a 71-year old mining and metals company headquartered in Bengaluru with operations centered on two mining leases covering about 2,000 hectares in Sandur, Karnataka. It is India's second largest manganese ore miner and Karnataka's third largest iron ore miner, with estimated rese...

Read the full report →

Catalysts

capex, margin expansion, regulatory approval, new product segment

Growth guidance

No guidance

Management consistency

mixed

RS rating: 26 Stage: Stage 1

Get valuation models, detailed research reports, thematic primers, one-pagers, risk analysis, growth triggers, bear case, capex tracker, walk the talk, and more for The Sandur Manganese & Iron Ores Limited and 4,900+ companies.

5-day free pass. No card required.