Diwali 2023 -Coal India, top gainer during Diwali mahurat trading session, share prices rise up to 4.1%

Coal India remained the largest gainer during during the mahurat trading session and its share price gained up to 4.1% .

Coal India had reported a strong performance during September quarter with 9.85% increase in revenue and a 12.51% increase in profit year-over-year during the September quarter. The results were declared post market hours on Friday. The positive performance indicates the company’s ability to generate higher revenue and profitability compared to the same period last year.

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The operating income of Coal India witnessed a significant decline of 25.78% quarter-over-quarter. However, on a yearly basis, the operating income increased by 12.18%. This indicates that the company has been able to improve its operational efficiency and control costs over the past year.

Analysts at Jefferies India Pvt Ltd post results have upgraded Coal india’s earnings per share by 18-42%. The price to earnings ratio of 6.4 times FY25 estimated earnings that the stock is trading at is reasonable.

Analysts at Jefferies said that Coal India’s cash earnings before interest tax depreciation and amortizations during the September quarter rose 11% year on year which was 4% above as estimated by Jeffereies. Volumes grew 12% year on year, which helped offset the impact of lower e-auction prices and higher staff costs. COAL’s volume growth trajectory has improved and is likely to sustain amid India’s rising power demand, while the big impact of wage hike and e-auction price fall has already come.

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Coal India’s volume growth remains strong . COAL’ India’s dispatch volumes, after falling 6% over FY19-21, grew at a strong 10% CAGR over FY21-23, and have risen further 9% YoY in Apr-Oct’2023.

Coal India delivered a strong FY23 with Earning per share rising 63% YoY to Rs46 (FY07-22 peak was Rs28), boosted by a sharp increase in e-auction realization amid rising global coal prices. Analysts at Jefferies said that were earlier concerned about a declining earnings profile as e-auction prices normalize and the quinquennial wage hike raises costs. An improved volume growth, along with lower-than-expected cost trajectory, has significantly improved COAL’s earnings outlook.

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Updated: 12 Nov 2023, 07:36 PM IST