Shares of state-run miner Coal India Ltd gained up to 2 percent on Wednesday after its first quarter financial results met analysts’ expectations.

Share Market Live

NSE

Analysts said operating profits or earnings before interest tax depreciation and amortisation (EBITDA) of Coal India were in line with their expectations and were bolstered by higher dispatch volumes.

Coal India on Tuesday reported a 10 percent decline in net profit at Rs 8,834 crore for the June quarter which was better than CNBC-TV18 poll estimates of Rs 6,489 crore for the quarter.

Total revenue increased 2.5 percent year-on-year to Rs 35,983.2 crore in the June quarter, beating the CNBC-TV18 poll estimates of Rs 34,998 crore.

EBITDA however declined 14.5 percent y-o-y to Rs 10,513.8 crore in the first quarter of FY24 over Rs 12,251 crore a year ago.

Brokerage CITI maintained a ‘neutral’ call on the stock and sees marginal uptick to shares with a target price of Rs 235.

CITI observed that Coal India’s first quarter EBITDA was in line with its expectations as e-auction prices corrected and these could fall further.

E-auction realisations corrected from Rs 4,525 in the March quarter to Rs 3,740 in June quarter.

The EBITDA declined due to increased costs as higher wages became effective and lower blended realisations (-3 percent), offsetting gains from higher volumes (dispatches up 5 percent YoY).

Coal India’s blended realisations were flattish on a yearly basis, it mentioned.

“Dividend yield at 11 percent helps,” CITI noted.

Another brokerage CLSA assigned a ‘buy’ call on the stock as it sees further gains of up to 17 percent in the stock with a target price of Rs 270.

While mentioning that the first quarter EBITDA was in line with expectations, CLSA stated that E-auction realisations softened 17 percent quarter on quarter while fuel supply agreement (FSA) realisations increased 6 percent YoY, helped by price hikes.

EBITDA ex-over burden removal (OBR)/t fell 17 percent YoY to Rs 597 (up 29 percent QoQ), CLSA stated.

The brokerage expects EBITDA (ex-OBR)/t to rise at a 3 percent CAGR over FY22-26 and volumes to rise at a 6 percent CAGR.

“With stock trading at a FY25CL PE of 6x, see risk-reward as attractive,” CLSA noted.

Coal India shares were trading 0.74 percent higher at Rs 231.95 on BSE at 11:59 AM after touching a high of Rs 235.70 in early trade.