Brokerage upgrades push Coal India to 52 week high

Morgan Stanley and Barclays upgraded Coal India to overweight and raised price target by as much as 22%

Shares of Coal India soared nearly five per cent on Friday after brokerages said the company would benefit from the new method for auctioning mines.  

Foreign brokerages Morgan Stanley and Barclays upgraded Coal India to overweight and raised that price target as much as 22 per cent. The stock ended 4.4 per cent higher to Rs 405.6, the highest since June 2014.

Morgan Stanley said auctions would boost Coal India’s earnings by 17 per cent, as prices were expected to be 40-50 per cent higher. The brokerage, which has set a price target of Rs 449 on the stock, said the company’s operating earnings could increase by nearly 30 per cent every year between 2015 and 2017 as regulatory risk declines.

Barclays also upgraded the stock and said the earnings would be boosted by an increase in the price of coal. BarclayS has set a price target of Rs 438 on the stock.