52.5% Payout, 5.44% Yield; Maharatna Stock Falls 4% On Ex-Dividend; Buy-On-Dips Opportuniy Here!

Coal India, the largest coal producer, turned ex-dividend on Tuesday, and the stock price was under selling pressure. CIL's share dived over 4.3% to hit an intraday low of Rs 441.20 apiece on BSE. The Maharatna company is set to reward investors with an interim dividend payout of 52.5% for FY24. Amidst the latest downfall, there is a buy-on-dips opportunity in CIL shares as leading brokerages like CLSA, Motilal Oswal, Emkay and JM Financial maintained BUY on the stock price.

CIL has touched record-high levels in recent times. On February 20th, the stock price witnessed profit booking. On BSE, the stock ended at Rs 446.55 apiece, down by 3.20%, after hitting an intraday low of Rs 441.20 apiece. The company's market cap is at Rs 2,75,196.63 crore.

Coal India has announced a second interim dividend of Rs 5.25/- per equity share on the face value of Rs 10/- for FY24. February 20th was fixed as the record date for determining eligible shareholders for this dividend payout. This was also its ex-dividend date.

The date of payment of the "2nd Interim Dividend" for FY 2023-24 shall be by 12, March 2024.

Earlier, the company paid its first interim dividend of 152.5% amounting to Rs 15.25 per share for FY24. Meanwhile, in the previous financial year 2022-23, Coal India paid up to 242.50% dividend aggregating to Rs 24.25 per share.

On the current market price, CIL has a dividend yield of 5.44%.

Coal India Brokerages Target Price:

While maintaining an 'Outperform' with a 'Positive' outlook, CLSA has set a target price of Rs 480 per share on CIL.

Further, Motilal Oswal and Emkay Global maintained BUY with a positive outlook. While Motilal set a target price of Rs 520, Emkay expects CIL's share price to touch Rs 561 per share, which is the highest target price.

JM Financial in its latest report dated February 19, 2024, said, "Coal India (CIL) in 3QFY24 conf. call moderated its production target, 780MT/850MT to 770MT/838MT in FY24/FY25 due to land issues in one of the mines of SECL. The management also guided for cooling off but stabilisation of e-auction premium, 116%/40- 50% in 9MFY24/4QFY24 & beyond, as estimated by us. The company during 3QFY24 reported
consol net revenue/Adj. EBITDA/ Adj. PAT of INR 362bn (+3% YoY)/ INR 119bn (+6% YoY)/
INR 97bn (+13% YoY)."

Given the consistent growth in e-auction volume (62MT/79MT in FY23/FY24E), momentum in power demand (peak power/energy demand 12.7%/7.6% YoY 9MFY24), the revival of thermal capex and revised production targets; JM's analysts note added, "we tweak our estimates with no material impact on our thesis. We maintain our BUY rating on the stock with an unchanged TP of INR 500."

At the highest target price, CIL has a potential of nearly 26% upside in the near term.

Led by positive performance, Coal India's (CIL) consolidated profit after tax (PAT) rose sharply to an all-time high of Rs. 9,094 Crores during the third quarter ending December 2023, of FY 2024, posting a robust 18% year-on-year growth. This
was the highest PAT earning during the third quarter of any year since the company's listing. In absolute volume the PAT jumped by Rs.1,375 Crores compared to Rs. 7,719 Crores in October-December 2022 period.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.