Research and broking house IDFC Securities has come out with a report on Coal India and has initiated an outperform rating on the stock with a target price of Rs 310. The research firm believes that the company is back on growth path after subdued FY17 and expects coal price and volumes to grow at compound annual growth rate (CAGR) of 3 percent and 6 percent respectively over FY17-20.
IDFC feels that rise in coal prices will to lead earnings before interest, tax, depreciation and amortization (EBITDA) CAGR of 21 percent over FY17-20 while on the other hand net sales and profit of Coal India is likley to grow at CAGR of 9 percent and 17 percent over FY17-20.
The house expects dividend per share of Rs 19 and Rs 23 for FY18 and FY19 respectively and return on equity (RoE) is likely to double to 82 percent in FY20 and expect Fuel Supply Agreement (FSA) coal prices to rise in H2FY18 due to improving demand.
At 11:07 hrs Coal India was quoting at Rs 271.40, up Rs 0.80, or 0.30 percent. It has touched an intraday high of Rs 274.40 and an intraday low of Rs 270.55.
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