Near-term worries outweigh Coal India's Q1 gains; stock falls 1.6%

Further fresh auction of coal mines to private players can also lead to higher competition for Coal India

Though Coal India delivered better-than-expected performance for the June quarter, the Street was not convinced given the near-term worries on pricing and stake sale. The stock declined 1.6 per cent on Wednesday.

While the performance in Q1 was lifted by better realisations for coal supplied under Fuel Supply Agreement (FSA), analysts are worried about declining international coal prices. The pressure on coal prices is leading to cheaper imports for major consumers with access to ports. This means declining e-auction prices.

The other worry for the Street is the stake sale by the government to meet its divestment target for the