Coal India share rallies 12% amid sell-off in broader market

Coal India share hit a fresh 52-week high today despite a sell-off in broader markets. The share of state-run firm rallied 12.17% to a fresh high of Rs 195.8 on BSE. Coal India share closed at Rs 174.55 in the previous session. The large cap stock has gained 13.61% in the last 3 days. Coal India share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

The stock has gained 60.43% in one year and risen 39.3% since the beginning of this year. Market cap of the firm rose to Rs 1.16 lakh crore on BSE.

The share fell to a 52 week low of Rs 109.50 on October 15, 2020.

Coal India is a dominant player in India's coal mining sector. Coal India accounts for over 80 per cent of the domestic coal output.

The firm is likely to remain market leader even as the government has opened the sector to private players for commercial mining.

Based on the demand projection in 'Vision 2024' for the coal sector in the country and subsequent demand projection on Coal India, a roadmap has been prepared to project production plan in the medium-term wherein Coal India has envisaged 1 billion tonne (Bt) coal production in the year 2023-24 to meet the coal demand of the country. To achieve this target, Coal India has identified major projects and assessed their related issues, the company said in the financial year 2020-21 annual report.

 Financial services firm Motilal Oswal Financial Services expects Coal India's profitability to recover in FY22E (plus 24 per cent YoY).

"Capex run-rate is likely to increase in the near term, but higher dispatches and some normalization in receivables should aid cash generation and maintain dividends. Demand has been improving with Coal India reporting a 33 per cent YoY increase in offtake for Q1FY22. With improving offtake and realizations, we see operating leverage coming into play in FY22," the brokerage said in an earnings update.

Coal India reported a 52.5% rise in Q1 net profit at Rs 3,174 crore against Rs 2,080 crore profit in the year ago period.

The consolidated revenue from operations increased 37% to Rs 25,282.15 crore in Q1 over Rs 18,486.77 crore in the year-ago period.

However, the consolidated expenses of the company during the quarter increased to Rs 21,626.48 crore over Rs 16,470.64 crore in the year-ago period.

The coal production of the PSU during the quarter ending June increased to 123.98 million tonnes over 121.04 MT in the quarter ended on June 30, 2020.

Meanwhile, Sensex was trading 239 points lower at 59,248 and Nifty lost 39 points to 17,709.