Buy Coal India; target of Rs 530: Motilal Oswal

Buy

live bse live

nse live Volume Todays L/H More ×

Motilal Oswal's research report on Coal India

4QFY24 revenue stood at INR374b (-2% YoY/+4% QoQ), in line with our est. of INR376b. Blended ASP was INR1,699/t (-9% YoY/-2% QoQ), largely in line with our estimate. Adj. EBITDA (net of OBR) stood at INR98b (+14% YoY/-17% QoQ) in 4Q, in line with our est. of INR95b. EBITDA/t stood at INR488 (+6% YoY/-22% QoQ), vs. our est. of INR 472, as lower costs led to improvement in operating performance.

Story continues below Advertisement Remove Ad

Outlook

COAL supplies 90% of its production to the power sector (including CPPs) and thermal power accounts for +80% of total power generated in India. To meet the increasing coal requirements of the power sector, COAL has made a long-term commitment via FSA agreements and BLCs. It targets to achieve a production of 838mt in FY25, with dispatches under e-auction at 15% of total volumes. With a robust volume outlook, healthy e-auction premiums, and lower costs, the outlook for COAL remains positive. We maintain our revenue/EBITDA estimates for FY25/FY26. The stock is trading at 4.4x FY26E EV/EBTIDA. We reiterate our BUY rating with a revised TP of INR 530 per share, valuing the stock at 5.3x FY26E EV/EBITDA. COAL remains our top pick in the metals and mining sector.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Motilal_COAL080524