Buy Coal India; target of Rs 290: Motilal Oswal

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Motilal Oswal's research report on Coal India

We expect global coal demand to remain strong in the near term as the world recovers from the pandemic and Europe shifts to renewables (in the long term) from Russian gas, increasing dependency on coal in near term.. We believe with continued heat wave in China, the hydro electricity production should reduce further, therefore, increasing reliance on thermal coal. We further believe Europe will continue to re-open as well as increase life of its remaining thermal power plants in a bid to shift away from Russian gas, and in the process will fuel demand for thermal coal.

Outlook

We raise our FY23/24E Adj. EBITDA by 6%/2%, respectively, and consequently increase our TP to INR290 (from INR275) premised on 4x FY23E EV/EBITDA. Maintain BUY.

More Info

At 10:45 hrs Coal India was quoting at Rs 228.00, down Rs 1.90, or 0.83 percent.

It has touched an intraday high of Rs 229.20 and an intraday low of Rs 222.10.

It was trading with volumes of 138,755 shares, compared to its thirty day average of 580,288 shares, a decrease of -76.09 percent.

In the previous trading session, the share closed up 2.25 percent or Rs 5.05 at Rs 229.90.

The share touched its 52-week high Rs 232.00 and 52-week low Rs 136.35 on 26 August, 2022 and 26 August, 2021, respectively.

Currently, it is trading 1.72 percent below its 52-week high and 67.22 percent above its 52-week low.

Market capitalisation stands at Rs 140,510.21 crore.

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Coal India - 290822 - moti