The shares of a PSU company specializing in mining, coal production, and operating coal washeries are in focus as they are trading at a discount of up to 30 percent. This article provides a brief overview of the company’s manufacturing capacity, future outlook, financials, and more.
Price action
With a market capitalization of Rs. 2,33,228.45 crores on Monday, the shares of Coal India Limited fell upto 9.1 percent, making a low of Rs. 350.15 per share compared to its previous closing price of Rs. 385.25 per share. The stock is currently trading at a discount of 30 percent from the 52-week high of Rs. 544.70.
About the company
Coal India Limited (CIL) is the largest coal producer in the world and a state-owned enterprise under the Government of India. It is engaged in the mining, production, and distribution of coal across the country and operates numerous coal mines and washeries. CIL plays a crucial role in meeting India’s energy needs, primarily supplying coal to the power, cement, and steel industries.
Manufacturing Capacity
Coal India Limited (CIL), the world’s largest coal miner, operates across 83 mining areas in eight states in India through its subsidiaries. The company oversees 322 mines, comprising 138 underground, 171 opencast, and 13 mixed mines.
CIL aims to boost its coal production to 1 billion tonnes by 2024-25, in line with national targets. For the upcoming fiscal year, the company is targeting a record output of 838 million tonnes and expects initial stockpiles of 80 million tonnes, reflecting an increase of over 15 percent compared to the previous year.
Future Outlook
Coal India Limited (CIL) has set a target to increase coal production to 1 billion tonnes by FY 2026-27, up from 773.647 million tonnes in FY 2023-24, reflecting a 10 percent year-on-year growth. The company plans to allocate Rs.15,500 crores in capital expenditure for FY 2024-25, with a focus on expanding into solar power and coal gasification.
Recent Major Events
An MoU was signed with BPCL on 02.12.2024 to explore setting up a coal-to-synthetic-natural-gas project at WCL through Surface Coal Gasification. Another MoU with IREL (India) Ltd was executed on 06.01.2025 for the development of critical mineral assets. Additionally, a 50 MW solar power plant, the largest in CIL, was commissioned at Northern Coalfields Limited (NCL) in Nigahi in November 2024.
Financial Performance
The company’s revenue declined by 1.13 percent from Rs. 38,357 crore to Rs. 37,922 crore in Q3FY24-25. Meanwhile, Net profit declined from Rs. 9,069.19 crore to Rs. 8,505.57 crore during the same period.
The company has shown remarkable growth in liquidity and earnings ratios. Its price-to-earnings ratio stands at 6.89, significantly lower than the industry average of 24.68. The company showcases a strong current ratio of 1.81 and a debt-to-equity ratio of 0.08.
In terms of return ratios, the Return on Capital Employed (ROCE) and Return on Equity (ROE) stand at 37.61 percent and 41.67 percent, respectively. Additionally, the stock has a dividend yield of 6.62 percent.
Written by Sridhar J
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