Feb 19, 2013, 02.13 PM IST | Source: Moneycontrol.com

Buy Coal India; target of Rs 400: Aditya Birla Money

Aditya Birla Money is bullish on Coal India (CIL) and has recommended buy rating on the stock with a target of Rs 400 in its February 19, 2013 research report.

Aditya Birla Money is bullish on Coal India (CIL) and has recommended buy rating on the stock with a target of Rs 400 in its February 19, 2013 research report.

“CIL’s consolidated net sales grew 12.9percent YoY to Rs173.3bn primarily on account of a 9.2percent YoY growth in sales volume to 120.1mn tonnes. Production grew 2.4percent YoY to 117.4mn tonnes. E-Auction and non-coking beneficiated coal realisations came in much higher-than-expected at Rs2941 per tonne (up 19.5percent QoQ) and Rs1718 per tonne (up 38.6percent QoQ) while FSA sales realisation came in lower-than expected at Rs1232 per tonne (down 3.8percent QoQ). This could be due to higher grade coal being e-auctioned and beneficiated. E-auction sales volume declined 8.7percent YoY to 10.48mn tonnes.”

“CIL’s consolidated EBITDA came in lowerthan expected at Rs42.9bn, down 5.7percent YoY on account of higher-than-expected power & fuel costs (higher diesel prices), welfare expenses, contractual expenses and other expenditure. EBITDA margin declined ~490bps YoY to 24.8percent.  CIL’s consolidated adjusted PAT came in higher than expected at Rs43.8bn, up 8.7percent YoY on account of higher non-operating income at Rs23.6bn, up 27.2percent, lower depreciation and lower tax rate at 29.5percent, down 170bps YoY. Higher non-operating income was on account of increase in both interest income and transportation recovery charges.”

“With the revision of our earnings estimates, and quarterly rollover of our 1 year forward DCF value, our 1 year target price increases by 3.1percent to Rs400 from Rs388 earlier. Our target price implies a potential upside of 16.6percent from the CMP. We, thus, upgrade our rating on Coal India from accumulate to buy,” says Aditya Birla Money research report.

Bodies Corporate holding more than 50% in Indian cos

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