BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Coal India Ltd.'s August 2023 operating numbers were robust. Key points:
production/sales volume continued at the highest-ever level for the fifth successive month in FY24;
South Eastern Coalfields Ltd.’s volume revival has offset the flat volumes from Mahanadi Coalfields Ltd.;
the traditional volume trough in Q2 is far lower in FY24 owing to increased rake availability;
higher volume to nonregulated sector, up 61% YoY in August 2023, is likely to maintain fuel supply agreement prices; and
pithead inventory at 45.3 million tonne remains at a comfortable level owing to production ramp-up.
Going ahead, we believe Coal India is likely to gain from operating leverage benefits accruing from higher sales volume for both NRS and e-auction customers, despite much lower e-auction premium than in FY23.
Maintain 'Buy' with an unchanged target price of Rs 285 (7.2 times FY25E earnings per share (core)).
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