Buy Coal India; target of Rs 600: Emkay Global Financial

Emkay Global Financial's research report on Coal India

Coal India has reported production of 51mt for September (10.4% MoM; -1% YoY). This aggregates to 341mt of production for 1HFY25. Likewise, offtake volumes were reported at 54mt for September, adding up to 363mt for 1HFY25. Coal India’s production volumes tend to be seasonal with the second quarter of any fiscal year softer than the rest of the quarters. The seasonality factor has averaged 41.4%/58.6% for 1H/2H, historically. Essentially, the production of 341mt in 1H implies full-year production of 825mt adjusted for seasonality, which is marginally lower than our estimate of 830mt and the company’s guidance of 838mt for FY25.

Outlook

We believe there is sufficient time and seasonalityled tailwind for the company to catch-up on production in 2HFY25. We reiterate our BUY rating on the stock with an unchanged target price of Rs600/share.

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