Coal India gains on upgrade by foreign brokerage

Coal India gained 1.93% to Rs 341 at 15:15 IST on BSE on reports a foreign brokerage house upgraded the stock to overweight from neutral.

Meanwhile, the BSE Sensex was up 87.85 points, or 0.11%, to 26,368.58.

On BSE, so far 1.14 lakh shares were traded in the counter, compared with an average volume of 3.33 lakh shares in the past one quarter.

The stock hit a high of Rs 342 and a low of Rs 331.60 so far during the day. The stock hit a record high of Rs 423.85 on 11 June 2014. The stock hit a 52-week low of Rs 240.50 on 26 February 2014.

The stock had underperformed the market over the past one month till 10 October 2014, falling 10.51% compared with Sensex's 2.81% decline. The scrip had also underperformed the market in past one quarter, declining 9.86% as against Sensex's 3.64% rise.

The large-cap company has an equity capital of Rs 6316.36 crore. Face value per share is Rs 10.

The brokerage said that Coal India will be main beneficiary of India's increased focus on domestic coal production and added that temporary ownership of cancelled coal blocks is also a positive for the company.

The Supreme Court in its final verdict announced on 24 September 2014, scrapped 214 out of 218 coal blocks allocated between 1993 and 2010 it had already declared illegal due to irregularities in the allocation of the blocks. The four coal blocks which are exempt from the verdict are run by the Central government with no joint venture with the private sector. Meanwhile, the Supreme Court gave six months' breathing time for the operational blocks to wind up operations. As per the order, allottees will have to pay a fine of Rs 295 per tonne from the time the coal was mined.

Coal India's consolidated net profit rose 8.1% to Rs 4033.28 crore on 7% rise in total income to Rs 1995.83 crore in Q1 June 2014 over Q1 June 2013.

Coal India is the largest coal producer in the world.

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