Buy Coal India; target of Rs 550: Emkay Global Financial

Emkay Global Financial is bullish on Coal India has recommended buy rating on the stock with a target price of Rs 550 in its research report dated May 03, 2024.

Broker Research

May 03, 2024 / 13:39 IST

BUY

Emkay Global Financial's research report on Coal India

Coal India’s headline EPS was ahead of our estimates owing to change in accounting policy for stripping activity that resulted in positive restatement of earnings. Excluding the effects of changes in stripping the accounting policy translates into softer than expected results for Q4. Net sales of Rs343bn are in line with our estimate of Rs346bn. e-Auction premiums for Q4 averaged at 65.7%, beating our expectations of 45-50%. However, full-year employee cost came in at Rs488bn, higher than Mgmt guidance.

Outlook

With the premiums sustaining at ~65% levels, we expect concerns around declining premiums alleviating to some extent, and see potential for upgrades to consensus earnings. We maintain our estimates for now, as we sense that the market would seek more clarity on accounting treatment from the management. (BUY; TP: Rs550/sh).

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