Coal India - Volume Momentum To Persist; Retaining A Buy: Anand Rathi

Anand Rathi Report

With dispatches of ~838 million tonnes expected in FY25 and ~900 million in FY26, Coal India Ltd. offers healthy volume assurance, driven by mounting coal demand by the power sector.

The focus on ramping up of FSA and eauction volumes, along with cost-saving steps, evacuation and infrastructure-improvement projects would drive the company’s performance. We expect more than 108 million/120 million tonnes of sales via auction determined prices in FY25/26.

E-auction premiums, now ~50%, are expected to be 55-59% over FY25-26. Over the last three years, the company intensified its capex (~Rs 340 billion likely over the next two years).

Higher capex would pave the way for 1 billion tonnes of production over two-three years. We retain a Buy, at a 12-month Rs 545 target price, six times FY26e enterprise value/Ebitda.

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