Buy Coal India; target of Rs 325: Motilal Oswal

Motilal Oswal is bullish on Coal India recommended buy rating on the stock with a target price of Rs 325 in its research report dated November 08, 2022.

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November 13, 2022 / 11:44 IST

26 Aug, 2025 12:21

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Motilal Oswal's research report on Coal India

COAL reported yet another quarter of strong, albeit inline performance. Eauction premium at an all-time high of 329% drove the strong performance. Net sales grew 28% YoY but was down 15% QoQ to INR298b in 2QFY23. The YoY sales growth was driven by a 23% growth in blended ASP mainly driven by 281% YoY growth in the E-auction ASP, and 5% YoY growth in total dispatch volumes. Dispatches were down 13% QoQ which is a seasonal factor, while blended ASP was down 3% QoQ to INR1782/t. E-auction ASP was up 40% QoQ to INR6064/t. Adjusted EBITDA (net of OBR) grew 100% YoY after a strong growth of 178% YoY in 1QFY23, but was down 37% QoQ to INR80b (largely inline) – the highest ever second quarter EBITDA for COAL.

Outlook

Consequently, we again raise our FY23 EBITDA/PAT estimate by 22%/27% after a 23% bump up in 1Q. We also raise our FY24 EBITDA/PAT estimates by 6%/3%, respectively, and our TP to INR 325 (up from 265), valuing the stock at 4x FY23 EV/EBTIDA. We reiterate our Buy rating on the stock and COAL continues to be our top pick in the metals sector.

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