Coal India Ltd.

NSE: COALINDIA | BSE: 533278 | ISIN: INE522F01014 | Industry: Coal & Mining
| Strong Performer, Under Radar
399.5500 -1.45 (-0.36%)
NSE Jun 10, 2025 15:31 PM
Volume: 6.4M
 

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Coal India Ltd.
03 Jun 2019
399.55
-0.36%
HDFC Securities
COAL needs to spend c40+% (FY15-21E) of OCF on capex, yet EBIT growth is mainly driven by price hikes. COAL is a cash (dividend) cow as it pays all FCF after capex as dividends. In our view, this is the only benefit that minority shareholders get. We thus believe a realistic way to value COAL is to focus on its dividend paying potential, hence we use DDM to value COAL. We maintain our SELL rating on COAL with a TP of Rs199. COAL reported strong Q4FY19 that beat market expectations comprehensively driven by better FSA realization & bonus related to FSA vol, which were offset partly by higher than expected employee cost. Overall, the result was a beat at the Revenue / EBITDA/PAT level. More importantly, this result doesn't setup COAL in a position to even meet our FY19 div est. of Rs 17/sh. Dividend announced thus far in FY19E is Rs 13.1/sh and there is little scope for a further round of div for the year.
Coal India Ltd. is trading above its 150 day SMA of 392.7
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