Motilal Oswal 's research report on Coal India
COAL has reduced production given the build-up in inventories at its own mines and power plants. In turn, the company is focusing on OBR (overburden removal), which should help it improve production. OBR has increased 15% over the past two months. Dispatches for COAL have increased over the past one week, even as power demand recovers and factories restart operations. As demand continues to recover and given the current focus on OBR, the company believes it would be in a better position to ramp up production.
The stock trades attractively at ~1.5x FY22E EV/adj. EBITDA (v/s historical average of 7x), P/E of 5x (v/s average of ~13x) and offers a dividend yield of ~7%. Maintain Buy with a target price of INR195/share.
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