Expect Moil's cash reserves to match its mcap in 2 years: G Chokkalingam

In a chat with ET Now, G Chokkalingam, Founder, Equinomics Research & Advisory, shares his top wealth-creating idea.
ET Now: What is the first stock on your radar? Why is it that you like this stock?

G Chokkalingam: We like Moil. The stock has been underperforming the market for more than four years. The reason for selecting the stock is that I believe that manganese ore prices have bottomed out post the recent correction. The company has got huge cash as well. The cash itself is 80 per cent of the market cap. With Rs 20 EPS for the current year, if profit grows at that rate - which are very likely - the core assets of the company would be free in the next 1-2 years.

The current market mcap would be equivalent to the free cash itself. In addition, we saw some forecast coming in from Chinese Steel Association last week. It said the Chinese capacity is going to be shut for at least 20 per cent of the total capacity. So I believe that in next six months, the metal outlook particularly for steel industry would start improving. This would be positive for Moil. Aalso this company has increased its capacity in the last two years. It has got new mines in Maharashtra. All these point towards a robust outlook for Moil.