Motilal Oswal's research report on Coal India
COAL’s 2QFY24 revenue was up 10% YoY at INR328b and was in line with our estimate of INR318b, driven by higher volumes and FSA realization. Blended ASP was down 3% YoY at INR1,726/t and FSA ASP was up 9% YoY at 1,542/t. While e-auction ASP declined 53% YoY to INR2,828/t, the e-auction premium stood at 83% (higher than our estimate of 70%). Though the e-auction premium cooled off from the peak, it is still above its historical average and is expected to be around 80-85% for FY24E. Adjusted EBITDA (net of OBR) increased 11% YoY to INR89b, 54% above our estimate of INR58b, owing to lower-than-expected employee costs, contractual expenses, and input costs. Excluding OBR, EBITDA increased 12% YoY at INR82b (66% above our estimate). APAT increased 13% YoY to INR68b (against our estimate of INR38b). This was driven by strong operating performance and lower depreciation. COAL declared its first interim dividend of INR15.25 for FY24.
Outlook
In line with the strong performance, improved outlook on volume, e-auction premiums, and lower costs, we have increased our EBITDA estimates by 16%/13% for FY24/FY25. The stock is trading at 4.1x on FY25E EV/EBTIDA. We retain our BUY rating with a revised TP of INR380, valuing the stock at 5x FY25E EV/EBTIDA. COAL remains our top pick in the mining sector.
For all recommendations report, 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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
