Top Broking Firm Bullish On Large Cap Maharatna Stock, Recommends "Buy" For 32% Strong Gains

Motilal Oswal Financial Services has a "buy" on Coal India Ltd. with a target price of Rs 275 apiece. The brokerage sees a potential upside of upto 32% if the stock is purchased at the current market price today. Coal India is Maharatna Status CPSE operating in the Mining sector. It is a large-cap PSU stock having a market capitalisation of Rs 1,28,955 crore. Key details below:

Stock Outlook - Current Market Price, 52 Week Low/High, Returns

The current market price of Coal India is Rs 209.15 apiece on NSE. The stock hit the 52 week low on 12 May 2022 at Rs 164.65 apiece and 52 week high on 9 November 2022 at Rs 263.40 apiece. It has given 3.82% negative return in the past 1 week and 3.78% in the past 1 month, respectively. However, in the past 1 year it has given 12.17% positive return. In the past 3 years, it has given 58.5% positive return. It has given 24.42% negative return in the past 5 years.

Valuations remain attractive, buy for Rs 275 target price

According to Motilal Oswal Financial Services, COAL is trading at 3.6x our FY24E EV/EBITDA and 1.8x our FY24E P/B, respectively. 4Q is a seasonally stronger quarter with the onset of the summer season. The demand for power too increases, consequently driving the requirement for higher coal volumes by power plants. "We maintain our e-auction premium estimate for FY23 at 231% and we reiterate our BUY rating on the stock with a target price of INR275 (5x EV/EBITDA). COAL continues to be our top pick in the mining sector. Any hike in FSA will further add to the financial performance of the company. COAL has declared a second interim dividend of INR5.25, thereby, taking the total dividend for FY23E to INR20.25. We have estimated full-year FY23 DPS of INR27," the brokerage has said.

Disclaimer - The stock has been picked from the brokerage report of Motilal Oswal Financial Services. 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 consult with certified experts before making any investment decision.