Accumulate Coal India; target of Rs 400: Angel Broking

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26 Aug, 2025 12:21

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Angel Broking's report on Coal India"For 1QFY2016, Coal India (CIL) reported a strong 12% yoy increase in production to 121.3MT as against our expectation of 118MT for the quarter. Ofttake volumes were also ahead of estimates at 129.4MT as against our estimate of 125.6MT. E-auction volumes at 16MT were 16% higher than our estimate of 13.8MT, while FSA volumes were in line with our estimate at 109MT. Blended realization/tonne came in lower than our expectation at Rs 1,465 (3.8% below our estimate of Rs 1,523), led by lower FSA as well as e-auction realisation. FSA realization/tonne was Rs 1,318 vs our estimate of Rs 1,373, while e-auction realisation was Rs 2,184 as against our expectation of Rs 2,343. Blended realisation remained flat on a yoy basis, resulting in a 6.5% increase in net sales. CIL reported net sales of Rs 18,956cr for the quarter, ie lower than our estimate by 0.9%. Led by the sharp increase in expenses, the EBITDA margin declined 93bp yoy to 23.1%. The EBITDA at Rs 4,382cr was 12.1% below our expectation of Rs 4,984cr. Lower other income was partially offset by lower than expected depreciation and tax expense, resulting in a net profit of Rs 3787cr, vs our estimate of Rs 4,499cr."Outlook and valuation"We reduce our consolidated FY2016 and FY2017 EPS estimates by 7.9% and 8.2%, respectively, in view of the better lower than expected realizations and increased operating expenses. We expect CIL’s production to increase 8.9% to 538MT in FY2016 and 575MT in FY2017. We expect e-auction realizations to come under pressure from increased availability of coal in FY2016. We value Coal India at 8x FY2017E Adj. EBITDA to arrive at a target price of Rs 400 and retain our Accumulate rating on the stock", says Angel Broking research report.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies 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.

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