Buy Coal India; target of Rs 185: Motilal Oswal

Motilal Oswal is bullish on Coal India recommended buy rating on the stock with a target price of Rs 185 in its research report dated August 12, 2021.

“India’s specialty chemicals industry is a decadal growth opportunity and it is still not too late to participate in the value creation process. We prefer CRAMS/CSM players Navin Fluorine (Navin) and PI Industries (PI) as they provide long-term earnings visibility. We also like UPL due to robust growth outlook and reducing debt concerns and SRF due to rising contribution from the chemicals business,” JM Financial research report.

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Motilal Oswal’s research report on Coal India

COAL’s 1QFY22 result highlights the benefit of a recovery in Power demand, leading to improved offtake and profits. Adjusted EBITDA (excluding OBR) jumped 64% YoY to INR46b. We expect profitability to recover in FY22E (+24% YoY). Capex run-rate is likely to increase in the near term, but higher dispatches and some normalization in receivables should aid cash generation and maintain dividends (dividend yield: 12%).

Outlook

We reiterate our Buy rating with a TP of INR185/share, based on 4x FY22E EV/EBITDA.

For all recommendations report, click here

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