Coal India shares have a one-year beta of 1, indicating average volatility during the period.
Shares of Coal India Limited (CIL) gained over 2 percent on May 3 even as the company's earnings for the quarter ended March 2024 missed Street estimates.
Despite the disappointing earnings, brokerages maintained 'buy' rating on the stock as they believe that coal remains the dominant fuel in the foreseeable future even as the world is trying to switch to renewable energy.
Jefferies also has a 'buy' rating on Coal India stock with a target price of Rs 520 per share.
Also Read | Coal India Standalone March 2024 Net Sales at Rs 488.05 crore, down 4.12% Y-o-YAt 9:47 am, Coal India shares were trading marginally lower at Rs 453.40 on the National Stock Exchange (NSE).
Coal India shares have a one-year beta of 1, indicating average volatility during the period.
Shares of Coal India Limited (CIL) gained over 2 percent on May 3 even as the company's earnings for the quarter ended March 2024 missed Street estimates.
Despite the disappointing earnings, brokerages maintained 'buy' rating on the stock as they believe that coal remains the dominant fuel in the foreseeable future even as the world is trying to switch to renewable energy.
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However, target prices were cut on concerns around declining premiums.
In Q4FY24, Coal India's net profit rose 26 percent YoY to Rs 8,640.5 crore due to cost efficiency and benefits from changes in accounting for stripping activities for open-cast mining. The state-run miner's revenue from operations rose 2 percent to Rs 37,410.4 crore.
With Coal India's premiums sustaining at around 65 percent levels, analysts at Emkay expect concerns around declining premiums alleviating to some extent, see potential for upgrades to consensus earnings.
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"We maintain our estimates for now, as we sense that the market would seek more clarity on accounting treatment from the management," said Emkay as it maintained 'buy' rating on the stock with a target price of Rs 550 per share.
Amid disruption in supply of natural gas from Russia; the demand has shifted to coal as an alternative. Domestically, power demand is on the rise due to increased industrial activities, noted Nuvama. The brokerage expects Coal India's volume to increase at 5 percent CAGR of over FY24-26 to 831 mt.
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"CIL is on its way to increasing its production and evacuation facilities to 1 bn tonnes by FY28. On account of sustained high coal demand, E-auction prices are likely to normalise in FY25," it said as it maintained 'buy' rating on the stock but cut the target price to Rs 537 per share.
Jefferies also has a 'buy' rating on Coal India stock with a target price of Rs 520 per share.
Also Read | Coal India Standalone March 2024 Net Sales at Rs 488.05 crore, down 4.12% Y-o-Y
At 9:47 am, Coal India shares were trading marginally lower at Rs 453.40 on the National Stock Exchange (NSE). So far this year, the stock has risen 18 percent, outperforming benchmark Nifty 50 which has risen 4.7 percent during this period.
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