5.97% Yield: Maharatna Coal India To Declare 2nd Interim Dividend For FY24, Record Date Fixed; Q3 Preview

The world's largest government-backed coal producer with a Maharatna status, Coal India is coming up with dividend rewards for investors this month. Coal India is set to recommend its second interim dividend along with Q3 results for FY24 on February 12. The company has accordingly declared a record date as well. In the quarter, earnings are likely to be muted due to a dip in e-auction prices. However, Coal India is already nearing brokerages' target prices ahead of earnings.

Coal India Dividend:

The leading PSU's board of directors are scheduled to meet on February 12, to consider and declare payment of the 2nd Interim Dividend for FY 2023-24, if any.

In its regulatory filing, CIL also said, the Company has fixed Tuesday, 20th Feb'24 as the 'Record Date' for payment of the 2nd Interim Dividend on Equity Shares for Financial Year 2023-24, if declared by the Board.

That means, for the second interim dividend, Coal India will also turn ex-dividend on February 20.

For FY24, the first interim dividend payout was to the tune of a whopping 152.5% amounting to Rs 15.25 per share. In FY23 alone, Coal India paid up to 242.50% dividend aggregating to Rs 24.25 per share.

At the current market price, Coal India's dividend yield is at 5.97%, which is the highest among PSU stocks.

Coal India Share Price:

On January 31, Coal India's share price ended at Rs 406.10 apiece, up by 0.9% with a market cap of over Rs 2.50 lakh crore. Coal India share is trading towards its 52-week high of Rs 416.25 apiece.

In six months, Coal India's share price has gained by nearly 69% on BSE as of now. In January 2024, the upside is over 6%.

At the latest, Axis Securities in its report said, CIL has demonstrated a good production run rate so far. It is implementing several measures to support its production targets, including i) using the MDO model (Mine Developer Operators) for greenfield and brownfield mines, ii) implementing FMC (First Mile connectivity) projects for evacuation efficiency, and iii) employing the latest technology for faster evacuation and transport, along with a focus on exploration."

Hence, the brokerage has set a target price of Rs 430/share for Coal India.

Coal India Q3 Preview:

In its preview report, Elara Capital said, Coal India's coal production rose 7% YoY to 179.88MT in Q3. Expect revenue to increase 5% YoY to Rs 340bn and PAT to rise 4% to INR 80bn in Q3. E-auction premium has declined to 70% from 150% on adequate coal supply. During 9MFY24, Coal India produced 532mt, up 11% YoY (FY24 target production 780mt), achieving >99% of the target. CIL may be ready to sell up to 1bn tonnes of coal by FY28E if demand continues to track higher."

While JM Financial's note said, "Coal India produced 199MT (+10% YoY) of coal during 3QFY24 and sold 191MT coal (+9% YoY). However, earnings are to be flat due to moderation in e-auction prices."

Incorporated in 1975, Coal India is the largest coal producer in the world. The government of India (GOI) conferred the Maharatna status on CIL in April 2011, providing the company with operational and financial autonomy. As of March 2023, CIL operates 322 mines, comprising 138 underground, 171 opencast, and 13 mixed mines. The company holds total resources of 178 billion tonnes (BT) and reserves of 54 BT. As of April 2021, India's total coal resource estimate stood at approximately 352 BT.

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