Coal India Surpasses Projected Demand, Citi Keeps Neutral Outlook

Coal India Ltd (CIL), which produces over 80% of India’s coal, reported a 12.6% year-on-year increase in coal production, reaching 51.4 million tonnes (MT) in September 2023. The company supplied 294.8 MT to the power sector, exceeding projected demand by 1.8 MT, in response to record electricity consumption.

From April to September, CIL’s total supplies rose to 360.7 MT, reflecting a 40% increase in the non-power sector. The company is targeting a future supply goal of 610 MT, aiming to surpass its previous record of 586.6 MT set in the fiscal year 2023.

According to available data, CIL has a market capitalization of Rs 1.79 trillion, with a price-to-earnings (P/E) ratio of 6.79 and an adjusted P/E ratio of 6.49 for the second quarter of the fiscal year 2023. The company has exhibited substantial revenue growth of 52.95% for the last twelve months, although it faced a quarterly decline of 20.45%.

Additionally, CIL demonstrates a robust return on invested capital and has consistently increased its earnings per share. The company maintains a stronger cash position than debt on its balance sheet, indicating solid financial health. These aspects, combined with impressive gross profit margins, position CIL as an appealing investment option within the Oil, Gas & Consumable Fuels sector.

Despite these positive developments, Citi has adopted a neutral outlook on Coal India’s share price on the National Stock Exchange (NSE), setting a target price of Rs 260. As of September, the coal stock at CIL’s pitheads was recorded at 41.6 MT.

This article was generated with AI assistance and reviewed by an editor.