We are starting a New Series where we will discuss Mid/Small Caps stocks based on Both Fundamentals and Technical for Short and Long term Investment. This week we will Analysis MSTC
MSTC limited (formerly known as Metal Scrap Trade Corporation Limited) was incorporated under the Companies Act, 1956 on 9th September, 1964. In 1982-83, the corporation was converted into an independent Government of India Company under administrative control of Ministry of Steel.MSTC Limited became a subsidiary Company of Steel Authority of India Limited (SAIL).
In 1982-83, the corporation was converted into an independent Government of India
Company under administrative control of Ministry of Steel. Presently, the company has
diversified mainly into providing e-auction/e-procurement services. Under this segment,
the Company undertakes disposal of ferrous and non-ferrous scrap arisings, surplus
stores, condemned plants, minerals, Agri & forest produce etc. from Public Sector
Undertakings and Government Departments including Defence. MSTC also import
ferrous and non-ferrous scrap, coke, finished steel, coal and petroleum products. Though 56 year old company, got listed in Mar’19, through Divestment
Fundamentals
1. Category-1 mini-ratna, with a mcap of Rs.1040cr…into trading, E-auction/commerce and recycling
2. Only e-com service provider in public sector
3. Turnaround from loss in 2018 to profits (in 2018 had a massive 528cr other income)
4. Slowly moving from traditional trading biz to e-commerce into e-aution of steel, minerals, petroleum, automobiles, food grains and coal blocks.
5. Commenced 2 new plants in 2020, that will help them both on Topline and Bottomline
6. MSTC has very good ROE and ROCE…has reduced debt also.
7. Being a PSU gives good dividend
Big Opportunities:
1. Vehicle scrapping policies by Govt which should be uneviled soon.
2. Auction of NPA assets by banks (MSTC might be chosen as single auction player)
3. Agriculture and Organic farm – e-auction of produce by farmers
4. Entering into private e-com space – recent tie-ups with Reliance, Vedanta, Mahindra, Indus Tower, Tata Power etc
5. Nominated as agency for coal block auctions
6. Divestment of FSNL
Threats/Negatives:
1. Mandate from govt to use GeM portal for procurement
2. Trading biz is slowing.
Prominent Individual shareholders:
1. Madhulika Agarwal – 1.06%
2. Ashish Kacholia – 0.98%
3. Sanjay Katkar – 0.79%
Technicals
Supply Demand Analysis
MSTC has give a range breakout in extreme short term and closed at trend line resistance suggesing break of 162 can see rally towards 166/176 in short term.
Elliot Wave Analysis
Till MSTC is holding 136-138 Range stock can head towards 221 in 8-12 months period based on Elliot wave Analysis.
Gann Analysis
Strong support at 136-138 zone heading towards 1×1 Gann Angle.
Traders can go long in range of 150-153 with SL of 135 for a target of 166/175/199/200/221
Hello Sir,
Is it right time to step in this stock now?
for investment no
Thank you Bramesh. I as a small individual investor appreciate your analysis. You have done amazing good work for small investors by adding such a nice series. Our best wishes are with you. Sanjay Sharma.