PSU Stock Upbeat As Profits Jumped 17% In Q3

Coal India‘s share price jumped back in the green on Tuesday morning halting the two-straight session losing streak.

What Happened: The public sector firm reported a 17% increase in its consolidated net profit, reaching ₹9,069 crore for the quarter ended December 2023, compared to ₹7,755 crore in the same period last year.

The company’s revenue from operations also witnessed a moderate uptick of 3% year-on-year, reaching ₹36,154 crore, up from ₹35,169 crore in the corresponding period of the previous year.

Coal output saw an 11% year-on-year increase reaching 199 million tonnes in the third quarter. Coal supplies rose by 9% to 191.30 million tonnes during the same period.

The mining giant also declared a second interim dividend of ₹5.25/share. The record date for the dividend has been set as February 20, with the payout scheduled for March 12. With this announcement, the total interim dividend for FY24 stands at ₹20.5 per share. This company had announced the first interim dividend of ₹15.25 per share in November last year.

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The board has approved the appointment of Mukesh Agrawal as CFO, effective from February 13.

Analyst Reactions: Jefferies maintained its “buy” call on the coal major, raising the price target to ₹550. The research firm said that the company’s growth trajectory has improved to feed the rising demand. The analysts added that despite the recent rally in the stock, its valuation is still reasonable.

Motilal Oswal also maintained its “buy” rating for the stock with a price target of ₹490. The domestic brokerage firm said that Coal India remains its top pick in the metals and mining basket.

However, analysts at Kotak Securities downgraded the stock’s rating to “sell” with a price target of ₹330. The brokerage said that the earnings outperformance was driven by lower cost of production and higher
other income.

Price Action: Coal India’s share price was up 1.69% to trade at ₹440.10 as the markets opened on Tuesday.

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Posted In: EarningsEquitiesNewsDowngradesPrice TargetReiterationMarketsAnalyst RatingsMoversTrading IdeasCoal India