Shares of state-owned Coal India Ltd (CIL) topped the Nifty50 league as the best performer with a 5 percent gain in Monday's trade after the company posted a 13 percent year-on-year growth in its output at 52.3 million tonnes (MT) in August. In the current session, Coal India stock rose 4.62 percent intraday to Rs 247.85 apiece against the previous close of Rs 236.9 on NSE.

Share Market Live

NSE

Analysts believe the ongoing momentum will continue as the PSU firm's August 2023 operating numbers were robust. Domestic brokerage house ICICI Securities has maintained a 'Buy' rating on the counter, pegging the target price at Rs 285. This implies a further upside of 20 percent from the current market levels.

Coal India reported strong operating performance for the fifth month in a row with both production and sales volume sustaining at historical highs.

"Key points: 1) sales volume at 1.9 mt/day (up 15.2 percent YoY) was aided by sharp uptick in volume at SECL – up 24.6 percent YoY; 2) sales volume to power sector was up 8 percent YoY at 43.6 mt, at 1.515 mt/day, higher than the committed volume of 1.44 mt/day; 3) offtake to NRS customers was up 61 percent YoY at 12.1 mt as the company cleared the linkage backlog, besides meeting the requirement. In our view, this would result in better FSA prices; 4) CIL’s pithead inventory was up 46 percent YoY at 45 mt – allaying any concerns of coal shortage," the brokerage noted.

Going ahead, ICICI Securities believes its FY24 sales volume estimate of 741 mt (up 6.5 percent YoY) is likely to be achieved as CIL has already delivered 7.5 percent YoY growth in offtake year-to-date-August 2023.

Among major positives, the brokerage sees enhanced rake availability and higher e-auction bookings.

Meanwhile, Religare Broking has picked CIL as its pick of the month for September 2023 and has recommended a ‘Buy’ on the stock with a potential upside of nearly 11 percent.

The CIL stock has risen 10.28 percent so far this year and gained 7 percent in the last one year. Coal India stock hit a 52-week high of Rs 263.30 on November 9, 2022 and fell to a 52-week low of Rs 207.70 on March 27, 2023.

In terms of technicals, the 14-day relative strength index (RSI) of the Coal India stock stands at 60.5, signaling it's trading neither in the overbought nor in the oversold zone. Coal India shares have a one-year beta of 0.7, indicating very low volatility during the same period.

First Published:Sept 4, 2023 3:34 PM IST