7% Dividend Yield: Maharatna Stock Coal India Declares Rs 15.25 Dividend; Buy?

The world's largest coal producer is Coal India Limited (CIL), a state-owned coal mining company. CIL is a Maharatna firm, an exclusive designation granted to a limited number of companies owned by the Indian government. With a dividend yield of 7% in FY23, Coal India is among the stocks with a high dividend yield. In addition, the company announced an interim dividend for FY24 of Rs 15.25 per share along with Q2 results.

Coal India Dividend

"The Board of Directors at its meeting held on date has inter alia, declared 1st Interim Dividend for the financial year 2023-24 @ Rs. 15.25/- per share on the face value of Rs 10/- as recommended by the Audit Committee of CIL at its meeting held on date. As already intimated to stock Exchanges vide letter no CIL:XI(D):4157/4156:2023 dated 18.10.2023, the company has fixed Tuesday, 21st Nov' 2023 as the "Record Date" for the purpose of declaration of 1st Interim Dividend on equity shares for the Financial year 2023-24.The date of payment of "1st Interim Dividend" for FY 2023-24 shall be by 9th Dec' 2023," said Coal India in a stock exchange filing.

An equity dividend of 242.50% at a face value of Rs 10 (or Rs 24.25 per share) has been declared by Coal India for its fiscal year ended in March 2023. With the current share price of Rs 349, this translates into a 7.23% dividend yield. The company has a strong dividend history and has paid out dividends on a regular basis over the previous five years. According to Trendlyne statistics, from February 18, 2011, Coal India Ltd. has issued 25 dividends.

Coal India Q2 Results

For the second quarter of the current fiscal year, the company's consolidated net profit climbed by 12.73 per cent year on year to Rs 6,813.50 crore, up from Rs 6,043.99 crore in the same quarter the previous year. The company's revenue from operations climbed 9.85% year on year to Rs 32,776.41 crore in Q2FY24 from Rs 29,838.07 crore in Q2FY23. For the July-September period of this year, the total expense climbed to Rs 26,000.05 crore from Rs 23,770.12 crore in the corresponding period of the previous year.

In the second quarter of this fiscal year, EBITDA climbed by 11.8% to Rs 8,137 crore, compared to Rs 7,280 crore during the same time in the previous fiscal year. In Q2FY24, the EBITDA margin was 24.8%, in Q2FY23 it was 24.4%. The total amount of raw coal produced in Q2FY24 was 157.426 million tonnes, compared to Q2FY23's 139.228 million tonnes.

Coal India Share Price Target

Deven Mehata-Equity Research Analyst at Choice Broking said, "COALINDIA exhibits a robust bullish trend, presently trading at elevated levels of 338, marking a 52-week high. The weekly charts reveal a compelling higher high higher low formation, demonstrating sustained upward momentum over the past 11 weeks, culminating in an impressive 42% surge. Crucially, the stock maintains its position above key moving averages, underscoring its inherent strength and positive trajectory."

"In terms of technical indicators, the Relative Strength Index (RSI) stands notably high at 76, reinforcing the stock's bullish momentum. While this signifies a strong market sentiment, prudent investors who entered at lower levels are advised to consider booking partial profits. A strategic move would involve trailing stop losses at 315, a level fortified by both historical significance and the 20-day Exponential Moving Average (EMA). Strategically, for prospective investors, entry on market corrections is recommended. A long-term outlook suggests targeting levels in the range of 425-450, aligning with the stock's historical all-time high," the analyst further added.

Disclaimer

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