Coal India Q3 Results Review: Motilal Oswal Reiterates 'Buy' On The Stock, Sees 28% — Here's Why

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Motilal Oswal Report

Coal India Ltd.’s Q3 FY25 witnessed a decent improvement following the drag seen in Q2 FY25 (which was affected by extended monsoon). The e-auction volumes also remained elevated with some increase in e-auction premiums, which supported profitability.

For FY26/FY27, we maintain our estimates and expect volumes to improve, which would boost earnings performance. The e-auction premium is expected to remain stable ahead.

The company’s focus on increasing coal-washer capacity will improve its market share in domestic coking/non-coking coal. Further, management is focusing on coalmine expansions, which would be funded via internal accruals, or Coal India might borrow to undertake certain strategic diversification projects, such as RE facilities and coal gasification, et al.

At current market price, the stock is trading at 3.3x FY27E enterprise value/Ebitda.

We reiterate our Buy rating with a target price of Rs 480 (premised on 4.5x on FY27 EV/EBITDA).

Coal India remains our top pick in the metals and mining sector.

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