Coal India Share Price Declines After Q3 Profit Falls

Coal India Ltd.'s share price fell nearly 2% during early trading on Tuesday after the company announced its third-quarter results with a 17% decline in profit due to higher deferred taxes and lower joint venture profits.

The state-run coal supplier reported a consolidated net profit of Rs 8,506 crore for the October-December quarter, compared to Rs 10,253 crore in the same period last year, according to an exchange filing on Monday. This has largely met the consensus estimate of Rs 8,368 crore of the analysts tracked by Bloomberg.

The company's revenue from operations slipped marginally to Rs 35,779.74 crore, which was also in line with the consensus estimate of Rs 34,978.9 crore. Income was impacted due to muted offtake and production growth of 2% and 3% decline in overall average realisations per tonne.

On the operating side, earnings before interest, tax, depreciation and amortisation declined 5% year-on-year to Rs 12,317 crore, but was higher than the forecast of Rs 11,407.8 crore. The margin contracted to 34.4% from 35.9%, while surpassing the estimate of 32.6%.

Emkay maintained a "Buy" rating on the Coal India stock with a target price of Rs 525, implying a potential upside of 40%. The brokerage said key operating metrics showed recovery in the third quarter, and earnings are believed to have bottomed out in the previous one.

With current valuations at six times its two-year earnings projection, the stock is considered attractively priced, Emkay said.

Coal India declared a second interim dividend of Rs 5.6 per share at a face value of Rs 10 for the financial year 2024-25.

Coal India share price fell as much as 1.8% to Rs 369 apiece in early trade. The scrip was trading in the red by 1.5% at Rs 370 by 9:52 a.m. The benchmark Nifty 50 was up 0.2%.

The stock has fallen 5.6% in the last 12 months. The total traded volume so far in the day stood at 3.3 times its 30-day average. The relative strength index was at 39.

Nineteen out of the 25 analysts tracking Coal India have a 'buy' rating on the stock, four recommend a 'hold' and two suggest a 'sell', according to Bloomberg data. The average of 12-month analysts' price target of Rs 472 implies a potential upside of 27%.