Domestic brokerage and research firm Motilal Oswal Financial Services expects strong domestic demand, better vision of one billion tonne production and better e-auction premium, to lead to strong near-term performance for Coal India stock.
“Coal is trading at 3.6 times our FY24E EV/EBITDA and 1.8 times our FY24E P/B respectively. We retain our e-auction premium estimate for FY23 at 231 per cent,” the brokerage said in its ‘Buy’ ‘ said repeating the rating. Coal India shares with target price 275.
With capacity up 32 per cent, state-owned CIL continues to be the top choice of brokerages in the mining sector.
Motilal Oswal believes that CIL is well positioned to capitalize on the opportunity for further growth. Any increase in FSA would further add to the financial performance of the company.
CIL looking to hire new talent
Over the last two to three years, CIL has gradually reduced its recruitment in the over 50 age group (zero recruitment in over 50 years executive roles in FY22) and has focused on hiring and retaining the younger generation along with fresh talent. focusing on. “This will help Coal India significantly reduce the wage bill over the next few years,” the brokerage said.
In addition, nearly 50 per cent of the workforce is above 50 years and due for retirement in the next few years and the younger workforce replacing the outgoing employees will command lower annual packages.
CIL Q4 Performance
The brokerage also expects CIL to post a better QoQ performance in Q4 with higher volumes on e-auctions and premiums almost at similar levels.
Coal India sells 10 per cent of its volumes in e-auctions at auction-determined prices and the brokerage expects the company to clock a total volume of 60 million tonnes in FY23E.
Cole declares second interim dividend 5.25 per share, thereby taking the total dividend for FY23 to Rs. 20.25. “We have forecast full year FY23 DPS 27,” the note said.
In the last one month, the share of Coal India has registered a decline of 4 per cent. Shares of the state-run miner were trading 207.85, down 0.29 per cent on the NSE in Monday trade.
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