Buy Coal India; target of Rs 480: Motilal Oswal

Motilal Oswal's research report on Coal India

1QFY26 revenue came in at INR358b (-2% YoY and -5% QoQ) against our est. of INR372b. Adj. EBITDA (excluding OBR exp) stood at INR111b (-4% YoY and -1% QoQ) against our estimate of INR115b. EBITDA/t stood at INR582 (flat YoY and +4% QoQ) vs. our est. of INR600/t. APAT at INR87b (-20% YoY and -9% QoQ) was in line with our est. The company declared an interim dividend of INR5.5per share in 1Q. Production stood at 183.3mt (-3 YoY and -23% QoQ) and Offtake stood at 190.6mt (-4% YoY and -5% QoQ).

Outlook

At CMP, the stock is trading at 3.3x FY27E EV/EBITDA. We reiterate our BUY rating with a TP of INR480 (premised on 4.5x on FY27E EV/EBITDA).