Buy Coal India: target of Rs 190: Sharekhan

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26 Aug, 2025 12:21

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Sharekhan's research report on Coal India

Q3FY2022 results reflect strong recovery with sharp 20% beat in PAT at Rs. 4,558 crore, up 48% y-o-y/55% q-o-q, led by sharp improvement in e-auction realisation and control on employee cost. E-auction realisation was up 33% y-o-y/22% q-o-q to Rs. 1,947/tonne, while FSA realisations declined 0.9% q-o-q to Rs. 1,370/tonne. Coal offtake volume grew by 13% y-o-y/18% q-o-q to 174 mt (in line), led by strong 17% y-o-y rise in FSA volume offset by a 5% y-o-y decline in e-auction volume. CIL’s growth outlook is improving with sustained focus to increase volume (offtake growth guidance of 17%/4% for FY2022/FY2023), better realisation (higher e-auction premium), and cost efficiencies. Diversification into solar generation, aluminium value chain, solar cell manufacturing, CBM, and coal gasification bode well for long-term growth.

Outlook

The stock trades at an attractive valuation of 4.8x its FY2023E EPS (close to trough valuation) and offers a high dividend yield of 12-13%. Hence, we maintain a Buy on the stock with a revised PT of Rs. 190.

More Info

At 16:00 hrs Coal India was quoting at Rs 159.90, down Rs 1.30, or 0.81 percent.

It has touched an intraday high of Rs 160.60 and an intraday low of Rs 155.50.

It was trading with volumes of 733,288 shares, compared to its thirty day average of 570,284 shares, an increase of 28.58 percent.

In the previous trading session, the share closed down 3.62 percent or Rs 6.05 at Rs 161.20.

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 21.56 percent below its 52-week high and 29.53 percent above its 52-week low.

Market capitalisation stands at Rs 98,542.03 crore.

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