50% Dividend Record Date In 15 Days: At 4.72% Yield, BUY Maharatna PSU Mining Stock For Rs 600 Target: Motilal

Brokerage Motilal Oswal recommended buy on Maharatna PSU giant Coal India ahead of the company's final dividend record date for 50% payout. CIL is scheduled to turn ex-dividend on August 16 for final dividend of Rs 5 per share for FY24. Coal India is dividend king stock.

In its valuation report, Motilal said, "COAL supplies ~90% of its production to the power sector (including CPPs), and thermal power accounts for +80% of total power generated in India."

It added, to meet the increasing coal requirements of the power sector, COAL has made a long-term commitment via FSA agreements and BLCs. It targets to achieve a production of 838mt in FY25, with dispatches under e-auction at ~15% of total volumes.

Further, Motilal added, "With a robust volume outlook, healthy e-auction premiums, and lower costs, the outlook for COAL remains positive. We largely maintain our EBITDA for FY25E and FY26E. We, however, raise our PAT estimates for FY25/FY26 by 11% and 3%, majorly on account of higher than expected OBR reversals. The stock is trading at 4.7x FY26E EV/EBTIDA. We reiterate our BUY rating with a revised TP of INR600, valuing the stock at 6x EV/EBITDA on FY26E. COAL remains our top pick in the metals and mining sector."