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Buy This Maharatna PSU Stock For Target Price of Rs 255, Stock Surged 5.89% In A Week
Edelweiss Wealth Research in its recent report has given a buy call to Coal India Limited (CIL), one of the leading PSUs in India, for a target price of Rs 255 apiece.
Considering the brokerage's estimated target price, the stock of the company is likely to gain 11% in 12 months.
Coal India is a small cap Maharatna Company engaged in the Mining sector. It is a large cap PSU company having a market cap of Rs 1,41,711 crore.
Stock Outlook
The current market price of the stock is Rs 229.95 apiece. On Friday it gained 2.07%. The 52 week low of the stock is Rs 136.35 recorded on 26 August 2021 and the 52-week high is Rs 232 recorded on 26 August 2022. Stock is trading near a 52-week high.
Returns On Investment
Stock over the week surged and gave 5.89% positive return. Whereas, in the past 1 month, it gave a positive return of 13.67%. In the past 3 months, it gave a 25.48% positive return. In the past 1 year, the stock gave a massive gain of 67.48%. In the past 3 years, the stock gave a positive return of 21.83%. Whereas, in the past 5 years, the stock fall and gave a negative return of 4.7%.
Business Overview
Coal India Limited (CIL) is an India-based holding company. The Company is a coal mining company, which is engaged in the production and sale of coal. The Company offers products, including Coking Coal, Semi Coking Coal, Non-Coking Coal, Washed and Beneficiated Coal, Middlings, Rejects, Coal Fines/Coke Fines, and Tar/Heavy Oil/Light Oil/Soft Pitch. Its Middlings are used in power generation, brick manufacturing units and cement plants.
Key highlights
According to the Edelweiss Wealth Research:
- Globally Thermal coal prices consistently remain at elevated level thanks to European energy crisis
- Higher global thermal coal prices will lead to sustainable higher E-Auction prices for Coal India
- We expect INR 47 EPS for FY23E, driven by good realisation in E-Auction and capacity ramp up
- When Global Macro (energy crisis) and volume growth is in favour of company, we expect reasonable PE of 10x for the company
Risks
- Government of India's OFS.
- Any Action by GOI to reduce higher profitability of company.
- Lower-than-expected new FSA demand.
- Loss of volume-linked incentive.
- Lower-than-expected volume growth.
Disclaimer
The stock has been picked from the brokerage report of Edelweiss Wealth Research. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before making any investment decision.
