Report card: How broking firms grade Coal India Q4 results

Riken Mehta
Moneycontrol.com
Shares in Coal India  jumped to three-month high on Tuesday after its consolidated fourth quarter earnings beat estimates coupled with news of price hike.


Coal India ‘s fourth quarter (January-March) consolidated net profit rose 34.9 percent year-on-year to Rs 5,414 crore. Its sales grew by 2.5 percent to Rs 19,904.5 crore from Rs 19,419 crore Y-o-Y, which too came in marginally above forecast.


Coal India said it would raise prices as of Tuesday, adding the hikes would increase revenue by about Rs 2119 crore for the rest of the fiscal year 2013-14.


Broking firms remain upbeat on Coal India after company’s fourth quarter earnings and price hike. The offer for sale by the Government still remains major overhang for the stock.


Morgan Stanley: OVERWEIGHT


Morgan Stanley has retained its ‘overweight’ rating on the stock citing the company on its way to deliver healthy production growth in FY2014.


“We expect CIL to raise FSA prices in the near term. With a cash balance of USD 11.5 billion at end-FY2013, we expect CIL to increase its dividend payout in the next two years, translating into yield of 8.2 percent in FY2014 and 9.4 percent in FY2015,” said the Morgan Stanley report.


Elara Capital: ACCUMULATE, TP: Rs 364


Brokerage house Elara Capital has maintained its ‘accumulate’ rating on Coal India as the firm believes the stock looks attractive from the point of dividend yield and cheap valuation. Elara Capital has a price target of Rs 364 per share.


JM Financial : BUY, TP Rs 370 


Domestic broking firm JM Financial has maintained its ‘buy’ rating on Coal India with a price target of Rs 370.


“Offer for sale by GoI is the key overhang on stock going forward with limited visibility on timing of the offer. We believe the stock has limited downside at current valuations and with triggers like higher dividends, price hike and production are expected to pan out in short to medium term, we maintain ‘buy’ with target price at Rs 370,” said the JM Financial note to clients.


Kotak: BUY, TP Rs 410


Kotak Institutional Equities has marginally revised its earning estimates of Coal India and also raised its target price to Rs 410 from Rs 404 earlier.


“Financial performance and reasonable valuations notwithstanding, unresolved business issues around incremental coal supplies and an impending stake sale have so far kept stock performance under check that may be catalyzed by the revision in coal prices. Maintain buy with a price target of Rs 410 per share,” said the Kotak note.
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s