Coal India share price tanked 3% to Rs 230.4 today after the company’s consolidated net profit fell 17.7% on-year to Rs 5527.62 crore in the March quarter on higher provisions made for wage revision of employees. Consolidated revenue for the quarter stood at Rs 35161.44 crore, up 17.3% on-year. The board recommended a final dividend of Rs 4 per share. Coal India shares have risen over 4% in the last one month and jumped 23% in the last one year. “Coal India posted poor results with profits coming down both on sequential and on-year basis by over 28% and 17% respectively. Any further fall in coal prices will drag the company’s margins further in the coming quarters,” said Diwakar Rana, Senior Research Analyst, Prudent Equity.
Stock call: Should you buy, sell or hold Coal India stock?
Motilal Oswal: Buy – Target Price: Rs 285
“We maintain our e-auction premium estimate for FY24 at 99%. We have reduced our adjusted EBITDA/APAT estimates for FY24 by 9.2%/9.9% to factor in higher employee cost provisions. We retain our BUY rating with a target price of Rs 285, valuing the stock at 5x FY24E EV/EBITDA. COAL remains our top pick in the metals and mining sector. At a CMP of Rs 237, the stock trades at an inexpensive valuation of 3.9x FY24E EV/EBITDA,” said analysts at Motilal Oswal.
Kotak: Reduce – Fair Value: Rs 240
“Wage provisions impacted earnings during the quarter, as expected. The prices of imported coal have seen a sharp moderation in recent months (US$130/ton now and averaging ~US$150/ton in 4QFY23 versus US$220/ton in 3QFY23 and over US$310/ton in 1HFY23). We maintain a REDUCE rating on the stock with a revised FV of Rs 240/share (Rs225/share earlier),” said analysts at Kotak Institutional Equities.
Nuvama: Buy – Target Price: Rs 301
“We increase our coal price estimates under FSA by ~2% in FY24/FY25 given the improved product mix and higher sales to the non-power sector. Consequently, this leads to a 12% increase in EBITDA for FY24E/FY25E. We roll over our valuation to FY25E, valued at 4.5x FY25E EV/EBITDA and arrive at a revised target price of Rs 301 (earlier Rs 295). Maintain ‘BUY’,” said analysts at Nuvama.
