Edelweiss bullish on Coal India has recommended buy rating on the stock with a target price of Rs 325 in its research report dated July 11, 2018.
Edelweiss' research report on Coal India
We upgrade CIL to ‘BUY’ led by: i) waning operating performance concerns: Q1FY19 sales volume growth at 11.2% surpassed our 8.0% estimate & e-auction premium remains robust; and ii) favourable risk-reward: The stock is trading at 9.6x FY20E EPS compared to 12.0x FY20E EPS in January 2018. In our view, CIL is immune to the macro concerns on the metals & mining sector compared to peers as it is a domestic story with little correlation of its valuation with international coal prices.
Our TP of INR325 implies exit multiple of 11.7x. Dividend yield of 6-7% over FY18-20E will be an additional sweetener.
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