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Kotak Institutional Equities have buy on Coal India, fair value at Rs 285

Valuations for Coal India remain attractive at 5.5 times price-to-earnings ratio.

Updated: Dec 03, 2019, 08.29 AM IST
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Kotak Institutional Equities have maintained buy rating on Coal India in the long term with a fair value of Rs 285 after the company reported 7% YoY decline in dispatches in November 2019. Shares of Coal India ended up 0.4% at Rs 205.85 on Monday while the BSE Sensex closed 8.36 points up at 40,802.17.

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 23223.00 crore and down -.08% from last year same quarter sales of Rs 20398.65 crore. The company has reported net profit after tax of Rs 3524.25 crore in the latest quarter.

The company’s top management includes Mr.Anil Kumar Jha, Mr.B Dayal, Mr.B L Gajipara, Mr.R K Sinha, Mr.R P Srivastava, Mr.S N Prasad, Mr.Sanjiv Son, Mr.V K Thakral, Ms.Reena Sinha Puri. Company has Ray & Ray as its auditors. As on 30-09-2019, the company has a total of 6,162,728,327 shares outstanding.

Investment Rationale

Valuations for Coal India remain attractive at 5.5 times price-to-earnings ratio and 4.8 times EV/Ebitda on estimated core earnings for FY21 and an attractive dividend yield of 12%, the brokerage said.

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