COAL INDIA LTD

Coal India Ltd is mainly engaged in mining and production of Coal and also operates Coal washeries. The major consumers of the company are power and steel sectors. Consumers from other sectors include cement, fertilizers, brick kilns etc.

Key Services

• Mining And Production of coal
• Operating coal washeries

Shareholding Pattern

PUBLIC GROUP

PROMOTER GROUP

Financial Summary

Synopsis of Financials

• Highest ever 9 months profit with PBT of INR31,937 crores and PAT of INR23,849 crores
• Market capitalization stood at INR2,31,719 crores on 31st December 2023
• Approved a second interim dividend of INR5.25 per share
• Employee cost expected to be less this year and remain flat or less in FY ’25
• Company will be able to supply more if demand goes beyond the target of 838 million tons.

Final Outlook

In FY24, CIL achieved coal production of 774 MT (largely in line with its target of 770 MT). FY25 target is at 838 MT, out of which, ~661 MT will be for the regulated power sector. For FY26, CIL has a coal production target of 1 BT.

CIL revenue is at Rs 37,410 Cr (down 2% YoY, up 3% QoQ) stood largely in line with our and consensus estimates. Reported EBITDA at Rs 11,338 Cr (up 21% YoY, down 13% QoQ), beat the consensus by 11%, led by lower RM costs (due to inventory build-up ahead of the peak summer which drove the cost of RM down) and change in the accounting policy for the stripping activity

We value the stock at 5.5x (vs. 5.0x) 1-year forward EV/EBITDA multiple on FY26E Adj. EBITDA (unchanged). Based on this, we arrive at our target price of Rs 505/share (from Rs 510/share), implying an upside of 12% from the CMP.

I will give Buy recommendation For this stock.