Buy Coal India, target price Rs 234: ICICI Securities
Coal India Ltd., incorporated in the year 1973, is a Large Cap company (having a market cap of Rs 105197.77 Crore) operating in Mining sector.
By ETMarkets.com | Updated:
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ICICI Securities has buy call on Coal India with a target price of Rs 234. The current market price of Coal India Ltd. is Rs 169.9. Time period given by analyst is one year when Coal India Ltd. price can reach defined target.
Coal India Ltd., incorporated in the year 1973, is a Large Cap company (having a market cap of Rs 105197.77 Crore) operating in Mining sector.
Coal India Ltd. key Products/Revenue Segments include Other Operating Revenue and Coal for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 25963.12 Crore, down -7.19 % from last quarter Total Income of Rs 27974.12 Crore and up 34.72 % from last year same quarter Total Income of Rs 19271.83 Crore. Company reported net profit after tax of Rs 3175.22 Crore in latest quarter.
Investment Rationale
A quick supply ramp-up in Oct’21 led to a 11.8% YoY increase in Coal India’s (CIL) offtake volumes and 19.2% YoY in 7MFY22, placing it favourably to clock all-time high offtake volumes in FY22E. Key reasons behind the volume surge despite challenges arising from mine flooding in Sep-Oct’21, were: 1) increase in power demand; 2) critically low coal stocks at most power plants; 3) unprecedented power prices on exchanges, 4) all-time high global coal prices fueled by shortages in China, which forced Indian importers to look for domestic sources. Offtake of >1.8mtpd in Oct’21 is continuing at present too, as power plants restock to cater to the anticipated demand surge post Diwali. Even assuming CIL ends FY22E with 10% YoY growth, it will take the annual offtake volume to >635mnte, which is higher than consensus estimates. Also, recent events leading to a shortfall in supplies has highlighted coal’s importance and necessity until large-scale storage solutions become viable. Elevated global coal prices and supply chain bottlenecks would likely make CIL a preferred coal supplier for the domestic consumers in the medium term.
Promoters held 66.13 per cent stake in the company as of 30-Sep-2021, while FIIs owned 6.74 per cent, DIIs 22.0 per cent.
Coal India Ltd., incorporated in the year 1973, is a Large Cap company (having a market cap of Rs 105197.77 Crore) operating in Mining sector.
Coal India Ltd. key Products/Revenue Segments include Other Operating Revenue and Coal for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 25963.12 Crore, down -7.19 % from last quarter Total Income of Rs 27974.12 Crore and up 34.72 % from last year same quarter Total Income of Rs 19271.83 Crore. Company reported net profit after tax of Rs 3175.22 Crore in latest quarter.
Investment Rationale
A quick supply ramp-up in Oct’21 led to a 11.8% YoY increase in Coal India’s (CIL) offtake volumes and 19.2% YoY in 7MFY22, placing it favourably to clock all-time high offtake volumes in FY22E. Key reasons behind the volume surge despite challenges arising from mine flooding in Sep-Oct’21, were: 1) increase in power demand; 2) critically low coal stocks at most power plants; 3) unprecedented power prices on exchanges, 4) all-time high global coal prices fueled by shortages in China, which forced Indian importers to look for domestic sources. Offtake of >1.8mtpd in Oct’21 is continuing at present too, as power plants restock to cater to the anticipated demand surge post Diwali. Even assuming CIL ends FY22E with 10% YoY growth, it will take the annual offtake volume to >635mnte, which is higher than consensus estimates. Also, recent events leading to a shortfall in supplies has highlighted coal’s importance and necessity until large-scale storage solutions become viable. Elevated global coal prices and supply chain bottlenecks would likely make CIL a preferred coal supplier for the domestic consumers in the medium term.
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Promoter/FII Holdings Promoters held 66.13 per cent stake in the company as of 30-Sep-2021, while FIIs owned 6.74 per cent, DIIs 22.0 per cent.
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