Limited upside seen in Coal India, says SP Tulsian

SP Tulsian of sptulsian.com told CNBC-TV18, “Coal India, yesterday we have discussed that results have been very good and yesterday I gave a target of Rs 325-326. But looking to the overhang of the offer for sale (OFS) I don’t think that one can really take a long term positive call on the stock because I don’t see it really moving beyond Rs 335-340.”

He further added, “We may swiftly see though the company has raised the prices of the lower quality of the coal and they have reduced the high grade quality may be with a calorific value of 6400 kilo calorie. But still if you see overall they will stand to gain by the higher realization by about 2.5-3 percent which will increase their profitability in FY14 plus they are targeting to breach the 500 million tonne of their production mark also. Everything is there in place but still the overhang of OFS – the kind of news if we start seeing from the government that they are considering that may be in tranches which is likely to happen, that is eminent for the government to take that OFS forward. I don’t think that much upside is seen in the stock may be beyond Rs 335.”