ICICI Direct has given Hold recommendation for Coal India with a target price of Rs. 160 in its research report issued on Nov 17, 2021
ICICI Direct’s research report on Coal India
Coal India (CIL) reported a subdued performance for Q2FY22 on account of lower-than-expected FSA realisation and e-auction realisation. During the quarter, FSA realisation, e-auction realisation was lower than our estimate. FSA realisation for Q2FY22 was at Rs 1382/tonne (down 2% YoY, 1% QoQ), lower than our estimate of Rs 1425/tonne & e-auction realisations for Q2FY22 were at Rs 1593/tonne (up 2% QoQ, 11% YoY), lower than our estimate of Rs 2000/tonne. For Q2FY22, CIL’s consolidated revenue from operations were at Rs 23291 crore (up 10% YoY but down 8% QoQ), lower than our estimate of Rs 24760 crore. Consolidated EBITDA was at Rs 3942 crore (down 1% YoY, 19% QoQ), lower than our estimate of Rs 4791 crore. Consolidated EBITDA margin for Q2FY22 was at 16.9% lower than our estimate of 19.3% (18.8% in Q2FY21 and 19.2% in Q1FY22). Consolidated PAT for Q2FY22 was at Rs 2933 crore, down 1% YoY & 8% QoQ, lower than our estimate of Rs 3211 crore.
We maintain our HOLD rating on the stock. We value CIL at Rs 160, 4.5x FY23E EV/EBITDA.