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Buy Coal India; target of Rs 200: Motilal Oswal

Buy Coal India; target of Rs 200: Motilal Oswal
November 26
14:24 2021

Motilal Oswal is bullish on Coal India recommended buy rating on the stock with a target price of Rs 200 in its research report dated November 25, 2021.

Broker Research

November 26, 2021 / 09:26 AM IST

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Motilal Oswal’s research report on Coal India

COAL’s 2QFY22 e-auction premiums have been disappointing. However, the management highlighted that the current premium is over 50% compared to the 15.3% reported in its 2QFY22 result. It has re-started e-auction to non-regulated sectors, which should result in improved profitability. The management expects the price hike to offset an increase in wages, given the current strong demand environment and high international coal prices. The stock trades at 3.4x/3x FY22E/FY23E EV/EBITDA, with an attractive dividend yield of 11%.

Outlook

We value the stock at 4x FY23E EV/EBITDA with a TP of INR200. We maintain our Buy rating, with a revised TP of INR200/share (from INR185 earlier). A surge in coal demand from the Power sector, which could squeeze supplies to non-regulated sectors through e-auctions, remains a key risk as it could hurt profitability.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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