Why Markets Have Turned Bullish On Coal India?

Coal India Ltd.’s share price has risen more than 90% in a year. As strong demand and rising production have improved earnings outlook and have led to gains for Coal India share price, analysts are expecting more than a 15% upside for Coal India share price from these levels also.

What Are The Reasons for Still Being Bullish On Coal India?

Coal India which has surged more than 90% in the last year, is still looking for further upside. The several reasons for this further bullish outlook are strong volume guidance for upcoming earnings, Coal India targets to achieve a production volume of 838 mt and 1,000 mt for FY25 and FY26 respectively. Analysts also analyse that Coal India is upgrading the mechanised coal transportation and loading system thus it is projected that by FY 29–30, the business will be able to boost mechanised evacuation from 151 MTPA (as of August 2019) to 988.5 MTPA.

Motilal Oswal says that Coal India is expected to report a 23.8% rise in net profit in Q4FY24 With its focus on volume ramp-up and cost savings, analysts at Anand Rathi factor in 13% Ebitda CAGRs (compound annual growth rate) over FY 24-26. They further said that The company has a prudent dividend policy and ahead a 50% payout is expected.

SBI Securities Target for Coal India

Coal India remains the pick of the week for SBI Securities where its target price of Rs.507 a piece indicates more than 14-15% upside for the Coal India share price trading currently at the level of Rs.448 a piece.

How Has The Stock Performed?

The stock has been in a continuous uptrend and is up by around 45% in the past 6 months, The stock’s current price-to-earnings ratio is at 9.25 against the industry P/E of 13.11 and the Price to Book ratio stands at 3.90. The stock has an attractive dividend yield of 5.50% For FY 2023-24 stock has given a cumulative dividend of Rs. 24.5 per share.

Conclusion:

With strong volume and earnings guidance ahead, the analysts are expecting an upside of around 14-15% from current levels. The stock is going to report its Q4 FY 2023-24 earnings on 2nd May 2024 and will also recommend a final dividend with that. Investors would have their eyes on the upcoming results with strong guidance. The stock is up by +3.5% from the last month and currently trades at Rs.448.40 a piece.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.