Accumulate Coal India; target of Rs 192: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Coal India

Govt of India decided to dissolve the current system of Coal India’s (COAL) auction of non-linkage coal through multiple windows. Currently, auction is conducted under five different windows like Spot (open for all the sectors including traders), Special forward E-auction for Power sector, Exclusive E-auction for Non-power, Special Spot E-auction and Special Spot E-auction for coal importers. In the new policy, all the auctions would be collapsed into one single auction which will put all sectors at par. Barring E-auction for power sector, all other segments garner strong realisations due to significantly better profitability of non-power sectors. E-auction for non-power constituted ~60% of COAL’s total E-auction volumes with realisations at ~1.5x of power sector. We expect an incremental revenue/EBITDA of Rs10bn factoring an additional realisation of Rs250/t on 40mnt of E-auction power volumes on account of higher reserve prices.

Outlook

COAL displayed strong performance on sales volume over last six months. However, delay in price hike of FSA (85% total volumes) remained a dampener. On balancing side, strong pick-up in E-auction realisations helped to negate absence of increase in FSA prices partially. Underpinned by improved operational performance and better outlook on both FSA (likely hike post state elections) and E-auction prices, we maintain Accumulate rating with TP of Rs192 (earlier TP Rs172), EV/EBITDA of 2.7x FY23e.

More Info

At 15:33 hrs Coal India was quoting at Rs 183.65, up Rs 15.00, or 8.89 percent.

It has touched an intraday high of Rs 185.50 and an intraday low of Rs 171.05.

It was trading with volumes of 3,078,007 shares, compared to its thirty day average of 612,104 shares, an increase of 402.86 percent.

In the previous trading session, the share closed up 3.18 percent or Rs 5.20 at Rs 168.65.

The share touched its 52-week high Rs 203.85 and 52-week low Rs 123.45 on 06 October, 2021 and 19 April, 2021, respectively.

Currently, it is trading 9.91 percent below its 52-week high and 48.76 percent above its 52-week low.

Market capitalisation stands at Rs 113,178.51 crore.

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