Coal India Share Analysis: Key Insights

This article aims to provide a detailed analysis of Coal India shares to assess its suitability as an investment opportunity. We previously explored the topic of Growth Potential Stocks To Invest In 2023 For Long Term extensively in another article. If you are interested, I encourage you to refer to that article for further information.

News about OFS

The share price of Coal India has been facing pressure in recent days following news of the Coal India Offer For Sale (OFS). For those wondering, an OFS stands for Offer For Sale, which is a financial market strategy that companies employ to sell publicly traded securities like stocks and bonds. It involves the firm actively opening up access to its shares for the public, offering them at a fixed price during a specified period of time. Typically, the OFS is conducted on a stock market platform.

In light of that, the company made an announcement regarding OFS at a price of ₹225 per share, significantly lower than the prevailing market price of the scrip, which had reached its high at INR 247.9. So, this selling is more strategic as shareholders are offloading their positions to subscribe at lower price offered by the PSU. This approach allows shareholders to participate in the OFS and potentially benefit from the lower price offered by the public sector undertaking (PSU).

Indeed, Coal India Ltd. is currently the hot topic in the market, with the burning questions like whether the share price of Coal India will rebound. Additionally, investors are curious about whether it is advisable to invest in Coal India Ltd and if it is considered a safe long-term bet. The answer to all these inquiries is affirmative. Yes, Coal India Ltd. is a formidable player in the coal mining sector, enjoying near-monopoly status. With a market capitalization of INR ₹ 1,40,078 Cr., the company is poised to achieve significant milestones in the long run.

Coal India Ltd Essentials- Fundamental and Financial Analysis

In the dynamic world of the market, theories may not always hold true. Therefore, let’s shift our focus to the concrete figures of the company starting from it’s financial report.

For the fiscal year ending on 31/03/2023, Coal India Ltd. reported a Total Operating Revenue of Rs. 1950.51 Cr. The Equity Capital of the company stands at Rs. 6162.73 Cr. These figures indicate a healthy balance sheet with a reasonable debt to equity ratio of 7%.

The company exhibits strong promoter holding, with 66.13% owned by promoters, while the remaining 33.87% is held by the public, including FIIs and DIIs.

Coal India demonstrates promising performance indicators. With a ROA of 49.86%, it showcases a positive sign for future performance, as higher values are desirable. The company’s ROE stands at an impressive 56.0%, while the ROCE is at 71.5%, adding further strength to its fundamentals.

Investors can also find value in Coal India’s stock through its dividend yield of 10.17%. This translates to a healthy dividend payout of Rs. 23.25 per share, accounting for 63.7% of the earnings distributed as dividends.

Analysis Of Company’s Past Year Performances

Over the past five years, Coal India Ltd. has demonstrated commendable profit growth with a CAGR of 32.0%. In the trailing twelve months (TTM), the company has achieved a remarkable profit growth of 62%.

Regarding the share price performance, over the last three years, COAL INDIA’s stock price has witnessed an increase of 18%. In the span of one year, the share price has risen by 26.2%. Coal India shares have delivered 60% return to its shareholders in last six months.

The company’s Return on Equity for the past three years stands at a solid 46.8%, indicating a healthy utilization of shareholders’ funds. In the most recent year, the ROE has further improved to 56%.

Coal India has also demonstrated notable sales growth. Over the past three years, the company has achieved a Compounded Sales Growth rate of 13%, which has increased to 26% in the TTM period. This signifies robust revenue expansion for the organization.

Overall, these figures highlight the positive financial and market performance of Coal India Ltd., emphasizing its potential as a strong investment option.

Earnings and Revenues for Coal India Ltd.

In the previous year, Coal India Ltd. witnessed a significant rise in annual revenue, with a growth of 27.4% amounting to Rs 144,802.6 Crores. The company’s annual net profit also experienced substantial growth, increasing by 62.3% to reach Rs 28,165.2 Crores.

In terms of stock performance, over the past year, the stock price of Coal India rose by 24.4%. Notably, it outperformed its sector by a slight margin of 0.2%.

During the last quarter, COAL INDIA reported earnings of 9.00 INR per share, surpassing the estimated figure of 8.85 INR, resulting in a positive surprise of 1.69%. Additionally, the company generated a revenue of 381.52B INR for the same period, surpassing the estimated figure of 370.30B INR.

Analysts anticipate a strong performance from Coal India shares. in the upcoming quarter, with an estimated earnings per share of 12.29 INR. Furthermore, the company is projected to achieve a revenue of 345.03B INR, signifying a positive growth outlook for the organization.

BOTTOM LINE

In summary, our detailed analysis of Coal India shares establishes that the company demonstrates robust financial performance and outperforms the market, reinforcing its positive trajectory and growth prospects. Sumeet Bagadia, Executive Director at Choice Broking said, “As on 22 Dec 2023, Coal India shares are looking bullish on chart pattern. Coal India share price may touch ₹380 ands ₹400 per share levels in short term.”

That’s all for the post. Hope I could disintegrate some facts.

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Disclaimer

The blog is meant for informational purposes and serves the general analysis of the stocks. Contents provided here are based on careful research and analysis utilizing the fundamental and technical indicators over a period of time. The post does not consist any direct recommendation about Investing or trading in the securities market. Thorough research and careful consideration are necessary for individuals to fulfill their personal responsibility in making financial decisions. Seeking professional advice before making any financial decisions is always advisable.