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Coal India shares climb 2% after UBS maintains buy call on the stock

UBS said volume recovery in the company will stay and the stock would re-rate on volume recovery.

February 25, 2020 / 10:28 AM IST
 
 
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Shares of Coal India climbed over 2 percent on February 25 after the global brokerage firm UBS maintained a buy recommendation on the stock with a price target of Rs 270.

UBS said volume recovery in the company will stay and the stock would re-rate on volume recovery.

"We believe domestic coal supply growth could exceed 5 percent per year till 2030 as coal remains the key fossil source in India," UBS said.

Market experts and brokerages highlight that coal would continue to dominate India’s electricity generation even as questions have been raised over the sustainability of thermal coal in India.

Coal India's Q3FY20 net profit fell 14.1 percent to Rs 3,921.8 crore versus Rs 4,566.8 crore in the year-ago period. Revenue was down 7.4 percent YoY at Rs 23,190.5 crore.

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"Coal India’s results highlight the impact of lower volume offtake amid subdued thermal power demand. Production at the company’s mines has started to ramp up post heavy monsoon, and we expect offtake to improve as power demand recovers," said brokerage firm Motilal Oswal Financial Services after Coal India's December quarter earnings.

The scrip traded 1.92 percent up at Rs 178 on BSE around 10:15 hours IST.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Feb 25, 2020 10:28 am

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