Buy Coal India; target of Rs 301: Reliance Securities

Reliance Securities' research report onCoal India

Coal India (CIL) has reported a subdued performance in the quarter ended March 31, 2017. In line with our estimate, its consolidated net sales rose by 8.3% YoY to Rs 247bn in 4QFY17 driven by 5% YoY and 3% YoY increase in coal off-take and average realisation, respectively. Its net profit fell by 38% YoY to Rs 27.1bn in 4QFY17.

Outlook

Looking ahead, we expect CIL’s RoE & RoCE to improve on the back of higher realization, expected improvement in margins and optimum utilization of assets. Expecting a meaningful revival in demand, we reiterate our BUY recommendation on the stock with a revised Target Price of Rs 301 (from Rs 319 earlier).

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