Buy Call: Maharatna PSU Stock Likely To Pay Highest Ever Dividend, TP Rs 389

Large cap state-run mining sector stock, Coal India shares witnessed a rally of more than 5% on BSE and crossed 300 mark today on the bourses. Current market price of Coal India stock on BSE is Rs 303.15 per share. Coal India stock also traded 52-week high today after leading brokerage firm Nuvama said in its latest report that the company provide triple advantages of volume growth, improved e-auction prices, and possible all-time high dividend in H2 FY 2024.

Brokerage Nuvama's View: Nuvama said, "Despite the stock rallying ~25% since Sep-23, we expect further upside potential of 35% within a year, excluding the dividend of Rs 30 in H2FY24E and Rs 25 in FY25E," said the brokerage.

Meanwhile, it is worth mentioning that Nuvama has increased the DPS (Dividend Per Share) estimate for Coal India from Rs 20 to Rs 30 in FY24, and Rs 35 in FY25. "We highlight that FY24E DPS of Rs 30 could be interim and should be paid out in H2FY24 (annualised dividend yield of ~21 percent)," added the brokerage firm.

"With the monsoon receding and hydro/wind generation falling, demand for thermal power is set to rise further in H2FY24. The rise in global coal prices coupled with an uptick in industrial activity pushed up the e-auction premium to 106 per cent in Sep-23 from 54 per cent in Jun-23," the brokerage said in its report.

Buy Call: The brokerage firm has given buy call to Coal India share and revised the target price of the PSU stock. It has upgraded the target price of Coal India share to Rs 389 apiece from Rs 361 apiece. If you buy Coal India share now at current market price of Rs 303.15, you can fetch likely upside of 28.32%.

Coal India Dividend History: Coal India announced 24 dividends since February 18, 2011. In the last 12 months, Coal India Ltd announced an equity dividend of Rs 24.25 per share. If the current share price of Coal India is taken into consideration, it offers a dividend yield of 8.00%, according to Trendlyne.

Coal India Stock Performance & Return: Last trading price of Coal India stock on BSE is Rs 303.15 per share. Its 52-week high price is Rs 303.95 per share and 52-week low price is Rs 207.70 per share. It has a market capitalisation of Rs 1,86,823.11 crore. Coal India shares witnessed a rally of 30% in last 3-months, gained 37% in last 6-months, soared 32% in last 1-year, rallied 61% in last 2-years, and gained 164% in last 3-years.

About Coal India: Coal India Limited (CIL) the state-owned coal mining corporate came into being in November 1975. With a modest production of 79 Million Tonnes (MTs) at the year of its inception CIL today is the single largest coal producer in the world and one of the largest corporate employer with manpower of 272445 (as on 1st April, 2020). CIL is a Maharatna company - a privileged status conferred by Government of India to select state owned enterprises in order to empower them to expand their operations and emerge as global giants.

Disclaimer

The stock has been picked from the brokerage report of Nuvama. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.