Last update: March 14, 2024 12:56 IST
Coal India Ltd rose 2.01% today to trade at Rs 425.3. The S&P BSE Metal index rose 0.06% to 26366.56. The index fell 0.91% over the past month. International brokerage Jefferies said the recent slump in Coal India shares presented a good opportunity for investors to buy into the state-owned miner.
The international brokerage maintained a 'buy' rating on Coal India with a target price of Rs 530 per share. From the BSE closing price of Rs 416.9, this implies an upside of 27%.
Coal India Ltd has fallen 5.99 per cent over the past month compared to S&P BSE Metal index down 0.91 per cent and SENSEX up 1.42 per cent.
Coal India stock, which is down 13% from its high, was attractive to brokers. Jefferies noted that the coal miner's stock is trading at a 57% discount to the Nifty 50 PE. From 2011 to 2018, Coal India typically traded at an average discount of around 16%.
Coal India's recent production growth trajectory has improved and is better suited to meet India's growing power demand. The decline in electronic auction prices also appears to have lagged behind significantly.
On February 19, Coal India management told analysts that e-auction premiums had fallen to 48-50% in January 2024 and 38% in February 2024. Meanwhile, trading volume increased by 17% to 13%. Percentage of sales.
Coal India has set a target to produce 838 million tonnes (MT) of coal in fiscal 2024-25, of which 661 MT will be supplied to the power sector alone, said PM Prasad, chairman and managing director (CMD) of the state-run company. revealed. said.
“Earlier Coal India’s target was 850 MT. However, as the Thermal Power Plants (TPPs) currently have huge stocks of coal, the ministry has revised the production target for FY25 to 838 MT. That said, if power demand increases significantly, Coal India will still be well positioned to produce more than the above target,” Prasad added.
Shares of Coal India fell 7% on Wednesday amid a market slump. The stock has fallen 10.5% over the past month.