Domestic brokerage and research firm Motilal Oswal expects global coal demand to remain strong in the near term as the world recovers from the pandemic and Europe shifts from Russian gas to renewable energy (in the long term), reliance on coal in the near term increases.
“India’s coal consumption is likely to increase and so will its thermal coal imports in the near future. As Europe continues to buy more South African coal, we believe that port-based power plants in India will remain closed. Or will work at a lower rate, which will increase the pressure. Domestic coal based power plants will increase production. This will increase the demand for domestic coal.”
Motilal Oswal expects FY23 e-auction premium to be in at least three digits as availability of coal for e-auction has come down drastically, most of the coal has been diverted to power sector, e-auction reforms have all Brings together non-FSA buyers. The platform whereby increasing competition, and rising South African coal prices, will prompt domestic consumers of South African coal to shift to domestic coal.
“Coal India trades our FY23/24E EV/Adj at 3.0x/4.3x. EBITDA. we expect 10% dividend yield At CMP (Current Market Price), as we anticipate strong earnings in future resulting in healthy dividends,” the brokerage said while maintaining its buy rating. Coal India shares and increased its target value 290 per (from 275).
Dividend means the distribution of surplus out of profits by a listed company to its shareholders. Coal India is returning cash to the shareholders by way of interim and final dividend for the quarter or year-end. In the last 12 months, Coal India Limited (CIL) has declared Equity Dividend in the form of 20.50 per share. at the current share price of 230, this results in a dividend yield of 8.88%, according to Trendline’s data.
State-owned coal mining company Coal India is the world’s largest coal producer. The PSU stock is up over 48% so far in 2022.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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