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