Coal India - Robust Demand To Drive Volumes; E-Auction Premium Softens Amid High Supply: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.In a recent investor interaction, Coal India Ltd. management highlighted the following points: Coal India would achieve production of 770 million tonne in FY24 and 838 mt by FY25;e-auction premiums have softened in Q4 FY24 to 35- 50%, but volumes via the e-auction route have improved (15% versus 8-9% in 9M FY24); and the company is committed to supplying at least 610 mt to the power sector in FY24 and increasing the dispatch by 50 mt p.a. going forward. Based on the year-to-date performance, Coal India is confident of achieving 770 mt of production during FY24, with five subsidiaries on track to achieve 100% of the annual production target. The number is lower than earlier guidance as SECL subsidiary would fall short by 8-9 mt due to some pending clearance for mine. Though e-auction premiums have declined in January-February-24 to 35-50% from 117% in Q3 FY24, the increase in e-auction volumes (~15% of the quarterly dispatches versus 8-9%) would largely offset the impact. Domestic power generation is expected to grow by 7.7% to 1,750 billion unit in FY24, which will drive coal demand. Dispatches to coal-fired plants till Jan-24 stood at 509 mt (up 7.3 mt YoY) and are expected to cross 610 mt in FY24E. In line with the recent trend in e-auction premiums, we have trimmed our e-auction premium for FY26E while increasing e-auction volumes. As a result, we have increased FY26E revenue/Ebitda/adjusted profit after tax by 1%/9%/7%. Coal India trades at enterprise value/Ebitda of 4.9 times FY26E. We reiterate our 'Buy' rating on the stock with a revised target price of Rs 520 (5.5 times EV/Ebitda). We believe Coal India is well placed to capitalize on the growth opportunity ahead..Click on the attachment to read the full report:.Whirlpool Promoter Plans To Sell 24% Stake Via Block Deal For Up To Rs 3,690 Crore.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Coal India - Robust Demand To Drive Volumes; E-Auction Premium Softens Amid High Supply: Motilal Oswal

Coal India trades at enterprise value/Ebitda of 4.9 times FY26E.

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