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CLSA retains buy on Coal India, target price Rs 270

Buy Coal India Ltd. at a price target of Rs 270.0 .

Updated: Nov 14, 2019, 08.40 AM IST
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CLSA has retained buy rating on Coal India in the long term with a target price of Rs 270. The stock ended down 1.3% at Rs 207.20 on Wednesday while the BSE Sensex closed 229.02 points down at 40,116.06.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 20382.63 crore, down -12.23% from last quarter sales of Rs 23223 crore and down -1.59% from last year same quarter sales of Rs 20712.71 crore. The company has reported net profit after tax of Rs 3524.25 crore in the latest quarter.

Investment Rationale

Coal India’s earnings outlook is weak near-term given muted volume growth and e-auction prices coming off a high base, said CLSA. However, the brokerage still finds it a good defensive play given little demand risk, low commodity price exposure, a net cash balance sheet, strong cash flows and its 10% dividend yield.
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