Coal India Top Nifty Loser After Over 4% Fall; Brokerages Maintain Mixed Rating After Q2fy21 Results

Share price of Coal India after its second quarter earnings were announced on November 12 fell to day's low price of Rs. 159.70 today (November 15, 2021), a drag of 4.3 percent from the previous day's closing price of Rs. 166.95 per share on the NSE.

Coal India Top Nifty Loser After Over 4% Fall; Brokerages Give Mixed Rating After Q2Fy22 Results

The mining and minerals company for the period under review posted a consolidated profit after tax of Rs. 2933 crore, a decline of 1 percent in comparison to Rs. 2952 crore posted for the same period a year ago. In the June quarter, the country's largest coal producing company posted consolidated PAT of Rs. 3174 that means a decline of 8 percent sequentially. Nevertheless, there was seen gains on the revenue from operations of 10 percent on a YoY basis to Rs. 23,291 crore as compared to Rs. 21,153 crore in the year-ago period..

Post the September results, brokerage maintained mixed rating on the Coal India stock:

ICICI Securities:

We maintain our 'buy' rating, our DCF-based target price of Rs 234, and our offtake volume estimates for FY22E / FY23E at 625mnte/655mnte, respectively. The stock is trading at 5.6x P/E and 2.9x EV/EBITDA on FY23E basis with 39.7 percent RoE. "We expect dividend payout to be high, leading to a 12 percent yield at current prices, as incremental capex in diversified segments is expected to be funded primarily by debt", adds the brokerage.

Citi

The research firm maintains a 'Neutral' take on the scrip and has reduced the target price from Rs. 185 to Rs. 160 per share. The Q2 e-auction premiums were muted, lacking visibility on catalysts, however, further upsides maybe limited as domestic coal supply improves. "With ESG concerns, a significant re-rating may not be easy", adds the brokerage.

CLSA

The research house maintains a "Buy" rating on the stock, with a target at Rs 210 a share.The Q2 EBITDA was below estimates on higher costs and lower realisations, however, EBITDA ex-OBR (0ver burden removal) fell 5 percent QoQ to Rs 272/t. Receivables fell to Rs 14,900 crore.

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