Coal India hits 52-week high: Shares of Coal India Ltd (CIL) are burning brightly in the exchanges, rising nearly 53 percent so far in 2022. State-owned coal mining company Coal India is currently trading at the 52-week high of Rs 237 on the BSE. . Favorable supply and demand dynamics and growing global demand for coal have boded well for the state-run coal producer.
The company did well on production in August, despite being a seasonally weak month due to the rain. Production increased 8.5 percent year-over-year (yoy) to 46.2 million tons, but the increase in offtake or sales volumes was limited to 5 percent yoy due to last year’s higher base. Deliveries to thermal power plants amounted to 86 percent of the total and grew 16 percent year-on-year. For FY23, the CIL offtake target is 700 million tons, representing 3.6 percent yoy growth for the remainder of this fiscal year.
Demand momentum in the energy sector is expected to continue, fueling the decline in the coming days. Motilal Oswal said in a note last week that it expects global demand for coal to remain strong in the near term as the world recovers from the pandemic and Europe switches to renewables (long-term) from Russian gas, reducing dependence on Russian gas. coal in the near future. term.
E-auction realizations are also robust. CIL supplies coal through the fuel supply agreements (FSA) and the e-auction route. Coal sold through e-auction tracks international coal prices, which have risen significantly so far in 2022.
Financial
Coal India’s first quarter profit rose 178.65 percent to Rs 8,833 crore from Rs 3,170 crore in the same quarter last year. The PSU’s total consolidated revenue from operations rose 38.8 percent to Rs 35,092 crore in the June quarter, from Rs 25,282 in the corresponding quarter of the previous fiscal year. Coal India’s earnings per share improved to Rs 14.33 in Q1 from Rs 5.14 in the same quarter a year ago.
What should investors do now?
Broker Prabhudas Lilladher shares as his mid-term technical pick: “the stock is in a strong uptrend making higher lows and higher highs. A correction was recently entered. It fell on channel support during the correction. Price behavior shows that the correction may have ended and a larger uptrend may resume.Buy for a target of Rs 255 with a stop loss of Rs 227.”
Ravi Singhal, CEO of GCL, said: “Coal India looks great at this price as winter is approaching and energy demand may also increase in the European Union region. Natural gas and other alternatives such as coal will be especially important in the future. This could benefit the stock more. Our target is to reach Rs.300 by December,” he said.
Ravi Singh, Vice President and Head of Research at ShareIndia, said: “The outlook for India’s coal supply is positive due to favorable supply-demand dynamics and growing global demand for coal. Despite the rainy season, the company’s coal production also increased last month. The sharp increase in electricity demand bodes well for India’s coal. The stock is also forming a bullish pattern on the daily and weekly chart. The volume increase will further support the trend.”
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