Coal India has released its third quarter results of its financial year 2024-25. This time the figures remained some sweet, some faded. While the company’s performance declined on an annual basis, things looked a bit improved on a quarterly basis. If compared to the third quarter of last year (Q3Fy24), Coal India’s profit fell 17.1% to ₹ 8,505.6 crore. At the same time, revenue also declined by 1% and it was reduced to ₹ 35,779.8 crore. Ebitda, the operational profit also declined by 5%, and its margin declined from 35.9% to 34.4%.
The company showed strength in the quarter
Comparing the previous quarter (Q2FY25), Coal India has made a great comeback. Profit increased by 35.2% to ₹ 8,505.6 crore. Revenue also led to a significant increase of 16.6%, and it came to ₹ 35,779.8 crore. Ebitda also saw an increase of 42.9%, and its margin increased from 28.1% to 34.4%.
Dividend gift
The company has declared the second interim dividend of FY25 ₹ 5.60 per share to please its shareholders. The record date for this has been fixed on 31 January 2025, and the payment will be made till 26 February 2025. On January 28, Coal India shares fell 2.03% to ₹ 367.75 on BSE. This price is close to its 52-week low ₹ 361.30.
Brokerage opinion: Buy, sell or hold?
Brokerage houses have different views on the performance of Coal India.
- Motilal Oswal says that the results of Q3Fy25 have been better than the previous weak Q2FY25. He has given a target of ₹ 480, giving ‘Buy’ rating. Accordingly, the company’s stock can jump about 30 percent. He believes that the company has benefited from the E-auction volume and premium lead.
- Kotak Institutional Equities have given a target of ₹ 360 on the company giving ‘SELL’ ratings. He says that volume growth is weak, and average realization has declined.
- Nuwama has given a ‘Hold’ rating and has kept the target price ₹ 419. He has attributed weak e-auction price and volume growth to the results.
- Morgan Stanley has given it a target of ₹ 525 with a ‘overweight’ rating. According to this target, this stock in the long term can give up to 42% return.
- JP Morgan has set a target of ₹ 435, giving a ‘Neutral’ rating.
According to brokerage, Coal India is now working on expansion of mines and increasing coal washer capacity. The company plans to complete these projects with internal funding. Also, funds may be required for projects such as renewable energy and coal gasifications.
The company’s shares are currently trading at 3.3x FY27E EV/Ebitda. Experts believe that stability in volume growth and e-auction premium may prove to be beneficial for the company.