ICICI Securities research report on Coal India
Coal India’s (CIL) Dec’23 operating performance stayed robust despite the high base. Key points: 1) Production growth continued to surpass sales growth; 2) MCL’s volume growth has recovered as land acquisition issues seem to be over now; 3) ECL’s recovery continued with offtake growth of 35% YoY; and 4) implied pithead inventory at 48.7mnte stays comfortable. Going ahead, we believe CIL is likely to achieve our FY24 offtake estimate of 751mt. Besides, the recent uptick in e-auction prices/volume bodes well for profitability. At this stage, we introduce FY26 estimates and value CIL at 7.5x EPS (earlier 8x EPS) as we roll over to FY26E.
Outlook
Our revised TP works out to INR 435 (earlier INR 395). We maintain BUY rating on the stock. Our recommendation is also based on a dividend yield of 8% through to FY26.
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