Rs 5 Dividend, Record Date Yet To Be Set: Buy Mining PSU As Shares Likely To Hit TP Rs 550

Brokerage firm Sharekhan has assigned buy call to large cap Maharatna PSU Coal India with target price of Rs 550 per share. Current market price of Coal India share on BSE is Rs 479.05 per share with intraday gain of 1.29% as on June 7, 2024. Coal India shares hit lower circuit on June 4 and traded 52-week high on June 3. The PSU has a market cap of Rs 2,95,225.50 crore. Coal India shares offered eye-popping returns of 107% in last 1-year span and gained nearly 36% in last 6-months.

LIC holds attractive stake of 10.18% in Coal India with 627,589,285 shares of the company. Meanwhile, FII/FPI holdings declined from 8.59% to 8.41% in March 2024 quarter. However, number of FII/FPI investors surged from 677 to 713 in March 2024 quarter. Check key details below:

Coal India Gives Subsidiary Update Pertaining to Incorporation: The BSE filing of the large cap PSU issued an update as on May 28, 2024 pertaining to incorporation of subsidiary arm, Bharat Coal Gasification and Chemicals Ltd (BCGCL) for undertaking a coal-to-chemicals business. Coal India possesses a majority of 51% stake in the new entity and BHEL has 49% stake, according to the exchange filing.

Coal India Share Performance: Shares of several PSUs declined sharply on June 4, 2024 when D-street witnessed massive bloodbath. Sensex closed on June 4 with huge fall of 4389 points to 72,079 points as LS polls outcome did not go the way exit polls predicted. The 52-week high price of Coal India share on BSE is Rs 527.20 per share (as on 03/06/2024) and 52-week low price is Rs 223.30 per share (as on 26/06/2023), respectively. Coal India shares declined over 4% in last 2-weeks, surged 25% year-to-date, gained 36% in last 6-months, and offered return of over 206% in last 3-years span.

Coal India Latest Dividend Announcement: According to the May 2, 2024 exchange filing of the PSU, "Board of Directors recommended payment of Final Dividend for the financial year 2023-24 @ 5/- per share of the face value of Rs 10/- as recommended by the Audit Committee of CIL in its meeting held on date subject to the approval of the Members at the ensuing Annual General Meeting ("AGM") of the Company."

Coal India Q4 Results: The PSU announced a surge of 26% in its consolidated net profit to Rs 8,682 crore for the quarter ended March 31, 2024. Revenue from operations witnessed decline of 2% year-on-year (YoY) to Rs 37,410 crore for March 2024 quarter as compared to Rs 38,152 crore in the corresponding quarter of last year. Sequentially, net profit of Coal India slipped 14% from Rs 10,130 crore declared in the preceding December quarter.

Revenue of the PSU jumped 3% quarter-on-quarter (QoQ). CIL announced consolidated EBITDA at Rs 11,337 crore for March 2024 quarter while margins declared at 30.3%. Total expenses for March 2024 fell 8% YoY to Rs 28,298 crore as against Rs 30,873 crore declared in Q4 of last fiscal. For the whole 2023-24, Coal India declared its net profit at Rs 37,402 crore, up 18% as against Rs 31,763 crore announced in FY23.

About Coal India: CIL is a Maharatna company - a privileged status conferred by Government of India to select state owned enterprises in order to empower them to expand their operations and emerge as global giants. The select club has only ten members out of more than three hundred Central Public Sector Enterprises in the country.

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