Geojit has given Buy recommendation for Coal India with a target price of Rs. 155 in its research report issued on Feb 18, 2021
Geojit’s research report on Coal India
Coal India is one of the largest coal producers in the world with coal production 602mt in FY20 and a target of 1000mt by FY23-24. In Q3FY21, consolidated revenue grew by 11.4% QoQ, as volumes increase due to demand recovery. FSA revenue increased by 9.2% QoQ to Rs. 16,674cr (down 7.4% YoY). EBITDA increased by 29.9% QoQ while margin expanded by 340bps QoQ to 23.8% driven by higher revenue and other operating income. As a result, PAT also rose 4.7% YoY. Expected rise in power demand and improving volumes along with effective control over costs could drive the company’s performance in near-term.
We reiterate our BUY rating on the stock with a rolled forward target price of Rs. 155 based on 4x FY23E EV/EBITDA.