Coal India’s stock reached a new 52-week high as brokerages revised their target prices upwards, fueled by the company’s strong performance in the second quarter of FY24. Jefferies upgraded Coal India from ‘Hold’ to ‘Buy’ and increased the target price to ₹385 per share, alongside raising earnings per share estimates by 18-42%.
During Q2 FY24, Coal India reported an impressive 9.85% increase in revenue and a substantial 12.51% rise in net profit year-over-year. The positive financial results led to a 4.76% surge in Coal India’s share price to ₹347.50 on the BSE.
Driven by heightened demand in the power sector, Coal India maintained its FY24 target dispatch to the power sector at 610 mt. The Ministry of Power’s electricity generation target for FY24 at 1,750 bu further supports Coal India’s positive outlook, with thermal power expected to contribute over 75%.
Analysts anticipate that the strong demand from the power sector positions Coal India for robust coal production in the coming years. Jefferies and Motilal Oswal Financial Services raised their target prices to ₹385 and ₹380 per share, respectively, with Motilal Oswal stating that Coal India remains their top pick in the mining sector.
JM Financial highlighted India’s record peak power demand growth and projected production estimates of 781 MT, 859 MT, and 936 MT during FY24, FY25, and FY26 for Coal India. They reiterated a ‘BUY’ call on the stock, raising the target price to ₹360 per share.
Kotak Institutional Equities, however, maintained a ‘Reduce’ rating on the stock, revising the target price to ₹275 per share. They emphasized factors like higher auction realizations and reduced provisioning for employee costs, cautioning investors to seek expert advice before making investment decisions.
As of 12:10 pm, Coal India shares were trading 4.39% higher at ₹346.25 apiece on the BSE.