Buy Coal India; target of Rs 440: ICICI Securities

ICICI Securities research report on Coal India

We see CIL’s FY25 performance to be impacted by possibly stagnant volumes, though e-auction price remains relatively stable. Key points: 1) Production and offtake volumes until Feb’25–YTD was impacted by rake unavailability, inclement monsoons and ongoing production issues at SECL. 2) Additional revenue from the additional levy at NCL mines likely at INR 38bn for FY26E. 3) Pithead inventory at 94mt as on end-Feb’25. 4) Relatively firm Indonesian prices (compared to South Africa) likely to aid e-auction prices in the near-term.

Outlook

We have pruned our sales volume growth estimate for FY25/FY26 to 1%/4% (earlier 3%/5%). Our revised TP works out to INR 440 (earlier INR 455) on an unchanged 7.5x FY27E EPS. Maintain BUY.