Edelweiss Securities' report on Coal India
Coal India (CIL) missed consensus Q2FY22 forecasts. Key points: i) Blended realisation was impacted by higher sales to the power sector. ii) E-auction premium over FSA at 15% was lower than our estimate. iii) Cost impacted by higher diesel price. iv) Good cash accretion due to working capital unlocking. v) H1FY22 capex at INR44.1bn Going ahead, we see several levers of stock performance: i) Higher eauction premium. ii) Possible hike in FSA price. iii) Lower-thanexpected wage hike.
Owing to significant cash accretion, we expect a dividend yield of 12–13% over the next two years. Maintain ‘BUY’ on the stock with a TP of INR210 at an unchanged 9x FY23E EPS.
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