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Coal India shares rise as board to consider dividend; brokerages see up to 47% upside

Coal India board will meet on November 29 to consider and approve an interim dividend for the year 2021 -22, if any

November 24, 2021 / 12:34 PM IST
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Coal India share price added 2 percent intraday on November 24 following an announcement that the state-run company's board will meet on November 29, 2021 to consider and approve payment of interim dividend for 2021 -22, if any.

Coal India has fixed December 7, 2021 as the “record date” for the payment of interim dividend on equity shares for the financial year 2021-22, if declared by the board, the company said in an exchange filing.

The country's largest coal producer reported a consolidated profit after tax (PAT) of Rs 2,933 crore, a drop of 1 percent from Rs 2,952 crore in the corresponding quarter of the previous year, missing estimates. The drop was 8 percent when compared to Rs 3,174 crore consolidated PAT reported in the June quarter.

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The consolidated revenues from operations at Rs 23,291 crore climbed 10 percent from Rs 21,153 crore in the corresponding quarter of the previous year. However, consolidated revenues from operations declined 8 percent from Rs 25,282 crore in the first quarter of this financial year.

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CLSA has kept a “buy” rating on the stock, with a target at Rs 210 a share, an upside of 32 percent from the current market price.

The Q2 ​earnings before interest, tax, depreciation and amortisation  (EBITDA) were below estimates on higher costs and lower realisations but EBITDA ex-OBR (0ver burden removal) fell 5 percent QoQ to Rs 272 a tonne. Receivables fell to Rs 14,900 crore, it said.

Citi has a “neutral” call on the stock and has cut the target price to Rs 160 from Rs 185 a share. The Q2 e-auction premiums were muted, lacking visibility on catalysts, however, further upsides could be limited as domestic coal supply improves.

With ESG concerns, a significant re-rating may not be easy, the research firm said.

Domestic research firm ICICI Securities has maintained “buy” rating, with a target price of Rs 234, with offtake volume estimates for FY22E / FY23E at 625mnte/655mnte, respectively. It expects an upside of 47 percent from the current market price.

"We expect dividend payout to be high, leading to a 12 percent yield at current prices, as incremental capex in diversified segments is expected to be funded primarily by debt," it said.

The stock was trading at Rs 159.45, up Rs 3.25, or 2.08 percent, at noon. It touched an intraday high of Rs 160.55 and an intraday low of Rs 155.65.

Disclaimer: The views and investment tips expressed by experts on moneycontrol.com are their own, and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Nov 24, 2021 12:34 pm

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