BoFA maintains 'Neutral' rating on Coal India
Bank of America Merrill Lynch has maintained its ‘Neutral’ rating on Coal India after the company changed pricing system for non coking coal to gross calorific value (GCV) based system.
By ET Bureau | Updated:
MUMBAI: Bank of America Merrill Lynch has maintained its ‘Neutral’ rating on Coal India after the company changed pricing system for non coking coal to gross calorific value (GCV) based system. The FII has a price objective of Rs 370 on the scrip.
“The revised pricing results in higher prices across grades, though this will likely be partly offset by discounts on grade slippages. Our initial estimate suggests that average notified prices could increase by 6-9 per cent vs. our estimate of 4 per cent increase in FY13e. A one per cent hike in notified price increases EPS estimate by 1.8 per cent. However, this could be negated by higher wage hike & lower volumes in our view. We maintain our Neutral rating,” the report said.
At 10:50 am, the stock was at Rs 325, down 0.55 per cent on the BSE. It touched a high of Rs 330.55 and low of Rs 324.50 in trade so far.
“The revised pricing results in higher prices across grades, though this will likely be partly offset by discounts on grade slippages. Our initial estimate suggests that average notified prices could increase by 6-9 per cent vs. our estimate of 4 per cent increase in FY13e. A one per cent hike in notified price increases EPS estimate by 1.8 per cent. However, this could be negated by higher wage hike & lower volumes in our view. We maintain our Neutral rating,” the report said.
At 10:50 am, the stock was at Rs 325, down 0.55 per cent on the BSE. It touched a high of Rs 330.55 and low of Rs 324.50 in trade so far.
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