Edelweiss's research report on Coal IndiaWe met senior management of Coal India (CIL) to know more about the steps the company is taking to tackle the impending wage hike and meet its sales target, among other things. CIL is confident of mitigating effects of the impending wage hike and increase in clean energy cess. Further, it has maintained its production target of 598mn tonnes for FY17. CIL is targeting to reduce costs by 5% every year primarily through manpower cost rationalisation and enhancing operating and supply chain efficiencies. Our assumptions remain unchanged. We maintain ‘BUY’ with TP of INR376 (16x FY18E PE). We believe that the company would be able to maintain its margins in FY17E led by pass through of wage hikes and volume growth. We keep our assumptions unchanged for FY17E and FY18E. The stock is trading at 12.0x and 12.5x FY17E and FY18E EPS, respectively. Maintain 'BUY/SO' with target price of INR376. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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