Macquarie upgrades Coal India to outperform, expects EPS to grow after 5-year
Shares of Coal India added rose 2.7 percent intraday Wednesday as Macquarie has upgraded the rating to outperform from neutral.
The broking house also hiked target price to Rs 310 from earlier Rs 280, implying upside of 21 percent.
The firm expects domestic coal market to remain tight in near to medium term, while lower supply and strong global prices to help e-auction prices from third quarter.
It feels that the supply tightness makes the risk-reward favourable.
Macquarie has raised earnings per share estimates by 3 percent, 6 percent and 10 percent each for the three financial years till March 2020.
Wage hikes and grade slippage has factored in the first half of the current financial year, while low coal inventory is going to keep volumes elevated in the next financial year, it added.
The research house expects EPS is likely to grow after five years and expecting 100 percent dividend payout in FY18.
At 11:46 hrs Coal India was quoting at Rs 280, up Rs 5.35, or 1.95 percent on the BSE.
Posted by Rakesh Patil