Share price of Coal India after its second quarter earnings were announced on November 12 fell to day's low price of Rs. 159.70 today (November 15, 2021), a drag of 4.3 percent from the previous day's closing price of Rs. 166.95 per share on the NSE.
The mining and minerals company for the period under review posted a consolidated profit after tax of Rs. 2933 crore, a decline of 1 percent in comparison to Rs. 2952 crore posted for the same period a year ago. In the June quarter, the country's largest coal producing company posted consolidated PAT of Rs. 3174 that means a decline of 8 percent sequentially. Nevertheless, there was seen gains on the revenue from operations of 10 percent on a YoY basis to Rs. 23,291 crore as compared to Rs. 21,153 crore in the year-ago period..
Post the September results, brokerage maintained mixed rating on the Coal India stock:
We maintain our 'buy' rating, our DCF-based target price of Rs 234, and our offtake volume estimates for FY22E / FY23E at 625mnte/655mnte, respectively. The stock is trading at 5.6x P/E and 2.9x EV/EBITDA on FY23E basis with 39.7 percent RoE. "We expect dividend payout to be high, leading to a 12 percent yield at current prices, as incremental capex in diversified segments is expected to be funded primarily by debt", adds the brokerage.
The research firm maintains a 'Neutral' take on the scrip and has reduced the target price from Rs. 185 to Rs. 160 per share. The Q2 e-auction premiums were muted, lacking visibility on catalysts, however, further upsides maybe limited as domestic coal supply improves. "With ESG concerns, a significant re-rating may not be easy", adds the brokerage.
The research house maintains a "Buy" rating on the stock, with a target at Rs 210 a share.The Q2 EBITDA was below estimates on higher costs and lower realisations, however, EBITDA ex-OBR (0ver burden removal) fell 5 percent QoQ to Rs 272/t. Receivables fell to Rs 14,900 crore.