Buy Coal India; target of Rs 450: Sharekhan

Sharekhan's research report on Coal India

Company reported a revenue of Rs. 35,842 crore, a decline of 1.7% y-o-y. Volume offtake decreased while the realization was almost flat. Adj. operating profit (ex-OBR) of Rs. 11,126 crore was down 3.6% y-o-y and inline with estimate. Consolidated PAT of Rs. 8,743 crore was down 20.2% y-o-y because of lower other income and higher depreciation. Coal India’s volume growth is expected to improve with the addition of thermal capacities. Also, IPO of its subsidiaries would help in some value unlocking.

Outlook

Valuation of 6.1x/5.8x its FY26/FY27 EPS estimates is attractive, and the stock offers a high dividend yield of ~7%. We maintain a Buy with an unchanged PT of Rs. 450.

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