5.25/Share Dividend: The King Of Coal Is Hot To Buy! Know Maharatna CIL's Ex-Dividend, Record, Payment Dates

The King Of Coal impressed with robust growth in Q3 earnings as margins surpassed estimates and PAT was the highest ever since listing. Like icing on the cake, Coal India also decided to reward its shareholders with a hefty interim dividend for FY24. This Maharatna company is truly a giant in its sector. On the back of consistent growth and stabilization, brokerage JM Financial has recommended buying Coal India for a target price of Rs 500.

Coal India Share Price:

At the time of writing, Coal India shares were trading at Rs 459.35 apiece, up by 1.54% on BSE with a market cap of Rs 2,83,238.99 crore. The stock traded near its intraday high of Rs 460.35 apiece.

Coal India shares have been in green so far this week.

The stock was near its 52-week high of Rs 468.50 apiece and was trading higher by 121.2% from its 52-week low of Rs 207.70 apiece.

Coal India Interim Dividend:

The world's largest government-backed company, Coal India has announced a second interim dividend of Rs 5.25/- per equity share on the face value of Rs 10/- for FY24.

The company has fixed Tuesday, 20, February 24 as the "Record Date" for the declaration of the 2nd Interim Dividend on equity shares for the Financial year 2023-24. 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.

At the current market price, Coal India's dividend yield is at 5.28%.

Coal India's Q3 Results:

Powered 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 the October-December 2022 period.

Consolidated revenue from operations during Q3 FY 2024 went up to Rs. 36,154 Crores marking a 3% growth over Rs.35,169 Crore of the corresponding period previous fiscal.

CIL's coal output of 199 MT in Q3 FY 2024 posted around 11% y-o-y growth against the 180.06 MTs. Coal supplies were up by 9% to 191.30 MT during the quarter against 175.8 MT of last fiscal's third quarter.

BUY Coal India Share!

In its research note, JM Financial said, "Coal India (CIL) reported consolidated net revenue INR 362bn (+3% YoY, +2% JMFe, +1% cons); Adj. EBITDA (ex-OBR) came in at INR 119bn (+6% YoY, +19% JMFe, +12% cons); Adj PAT stood at INR 97bn (+13% YoY, +24% JMFe, +25% cons). Significantly lower opex aided by inventory benefit led to a beat on EBITDA/PAT estimates. E-auction realizations improve to Rs 3321/t during 3QFY24."

Further, JM's note added, "We estimate CIL to report 781/859/936 MT of production against the internal targets of 780/840/1,000 MT for FY24E/25E/26E respectively. With recent initiatives such as Mine Developer and Operator (MDO) along with increasing power demand and the government's renewed focus on higher thermal capacity additions, we expect CIL's production to steadily increase and sustain the growth momentum in alignment with power demand."

Also, international coal prices are stabilising. JM's note added, "The e-auction prices have softened since 2QFY23 (INR 3,321/t in 3QFY24 from a high of INR 5,046/t in 3QFY23) due to moderation in international coal prices. Currently, Indonesia coal prices (5,900 GAR), which have corrected sharply (USD 218/ton in Mar'22 to USD 88/ton in Aug 23) are consolidating (USD 88-90/ton) and are expected to remain range-bound. So, we believe that e-auction prices will appreciate as envisaged in 'King Coal' is coming back and leading incremental improvement in margins."

On the valuation, JM's note said, "Given the continued momentum in power demand (peak power/energy demand YoY growth of 12.7%/7.6% during Apr-Dec'23) and focus on thermal capacity additions, we estimate CIL to report 782/859/936MT of production during FY24E/25E/26E. With consistent growth in production and stabilization in international coal prices, we reiterate our BUY rating on the stock with a TP of INR 500 (earlier INR 360)."

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.