Coal India has moved higher by 6% to Rs 270, despite of weak April-June (Q1FY14) results, on expectation of earnings improvement by going forward. The stock has bounced back 9% from intra-day low Rs 248, also its record low since listing on BSE.
Coal India has reported 17% year-on-year (yoy) fall in its net profit at Rs 3,731 crore for Q1 due to lower average realisation and an inflationary pressure on fuel and wage costs.
Analyst at Prabhudas Lilladher expects the company’s earnings to improve Q2FY14 onwards on the back of full absorption of 5% increase in noncoking coal prices, improved E‐auction realisations and peaked‐out costs.
Stock witnessed steep correction in the last two months, primarily on account of offer-for-sale and subdued E-auction prices. Nevertheless, the current beaten down valuations and attractive dividend yield at around 7% drive us to maintain our ‘Accumulate’ rating, added report.
Coal India has reported 17% year-on-year (yoy) fall in its net profit at Rs 3,731 crore for Q1 due to lower average realisation and an inflationary pressure on fuel and wage costs.
Analyst at Prabhudas Lilladher expects the company’s earnings to improve Q2FY14 onwards on the back of full absorption of 5% increase in noncoking coal prices, improved E‐auction realisations and peaked‐out costs.
Stock witnessed steep correction in the last two months, primarily on account of offer-for-sale and subdued E-auction prices. Nevertheless, the current beaten down valuations and attractive dividend yield at around 7% drive us to maintain our ‘Accumulate’ rating, added report.
