Buy Coal India; target of Rs 395: ICICI Securities

ICICI Securities research report on Coal India

Coal India’s (CIL) Nov’23 operating performance remains robust. Key points: 1) Supplies to regulated and non-regulated sectors rose 5.8% YoY and 7.4% YoY, respectively; 2) during 8MFY24, both BCCL and NCL achieved their respective progressive targets, while SECL has accounted for 42% of incremental coal supply; and 3) pithead inventory stands at comfortable 45mt, up 58% YoY. Going ahead, we expect firm international coal prices to have a trickle-down effect on e-auction prices, resulting in better profitability.

Outlook

At this stage, we still believe the street’s EPS estimate of INR 41 each for FY24/FY25 looks conservative. We retain BUY on CIL with an unchanged TP of INR 395 (8x FY25E EPS).