Range
Stop Loss
Target
Coal India (NSE Cash) - BUY
293 - 288
266
342
Daily Chart
Technical Evidences
Since last nine months, the stock has been
consolidating in a falling channel.
The prices have shown breakout from the
channel with higher volumes, thus
indicating start of an uptrend in the stock.
The prices, which were trading within the
‘Bollinger Bands’ in last nine months, have
given breakout from the upper band.
The ‘RSI Smoothed’ oscillator is also
showing positive crossover from its
average on daily and weekly charts.
Considering the positive placement of
‘SuperTrend’ and ‘PSAR’ indicators, we
expect this stock to give a decent up move
in the medium term.
Thus, it can be bought from current level to
a decline up to `288 for a target of `342
in coming three months. A stop loss can
be placed at ` 266.
Source: Falcon ( Chart time: 10:00 IST )
May 30, 2016
Stock Info
Coal India
Strong production growth to drive revenues: Coal India’s (CIL) production has
Sector
Mining
increased at a CAGR of ~8% over the last two years, as against a CAGR growth
of 1.8% between FY2010-14. Off-take growth has also picked up to 9% yoy in
Market cap
177,711
FY2016 as against a CAGR growth of 3.2% in FY2010-14. With India still being
a net importer of coal, we believe CIL’s production and off-take would continue
Beta
0.8
to increase at similar rates over the coming years. CIL has already finalised plans
to achieve targeted production of 925MT by FY2020 and is planning to increase
production to 1bn tonne. We believe the production growth target is a bit too
52 week high/low
447/272
optimistic and expect CIL’s production to grow at a CAGR of ~8%.
Asset quality: CIL’s net realisation is significantly lower than the landed price of
Avg. Daily Volume
35,70,263
imported coal, despite the low prevailing global prices, providing enough
cushion to pass on any cost escalations. The increasing share of washed coal will
Face Value (`)
10
also help improve realizations. Further, technological and infrastructural
enhancements, coupled with operating efficiencies from rising production will
help to keep production costs low.
Shareholding Pattern (%)
Outlook: Coal India is a strong play on the domestic power demand with the
current Government taking proactive measures to resolve issues within this space.
The stock is currently trading at ~6x FY2018E EV/EBITDA. With a strong dividend
Promoters
79.7
yield of ~7%, the current valuation looks attractive.
MF / Banks / Indian Fls
8.6
Company
Sales
OPM PAT EPS ROE P/E P/ABV EV/EBITDA EV/Sales
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FII / NRIs / OCBs
8.6
FY2017E
82,770
23.7
16,653
26.4
41.6
11.1
4.5
5.9
1.6
Indian Public / Others
3.1
FY2018E
86,807
22.6
17,496
27.7
42.0
10.5
4.3
5.9
1.5
May 30, 2016
Research Team Tel: 022 - 3935 7800
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Disclosure of Interest Statement
Coal India
1. Analyst ownership of the stock
No
2. Angel and its Group companies ownership of the stock
No
3. Angel and its Group companies' Directors ownership of the stock
No
4. Broking relationship with company covered
No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.
April 18, 2016
