Coal India hits over 7-year high post Q2 results; zooms 47% since September

The company also declared the first interim dividend for FY24 at Rs 15.25 per share and fixed November 21, 2023 as the record date for the same

Shares of Coal India rose 2 per cent on BSE to hit the highest level in over seven years. The stock touched Rs 337.75, its highest since September 2016, in Monday’s otherwise weak intra-day trade.

The gains came after the company reported a better than expected September quarter (Q2FY24). In comparison, the S&P BSE Sensex was down 0.45 per cent at 64,968 at 09:33 AM.

Since September this year, the market price of Coal India has zoomed 47 per cent.  

The company has also declared the first interim dividend for FY24 at Rs 15.25 per share and fixed November 21, 2023 as the record date for the same

Today's gains helped Coal India reclaim its Rs 2 trillion-market capitalisation. Currently, Coal India has a market capitalisation of Rs 2.07 trillion, the BSE data showed.

Coal India on Friday reported a 12.5 per cent YoY rise in consolidated net profit to Rs 6,799.77 crore for Q2FY24 on account of higher sales.

Its consolidated sales increased 10 per cent year-on-year (YoY) at Rs 32,776 corre, driven by higher volumes and Fuel Supply Agreement (FSA) realization.

Coal sales volume for Q2FY24 came in at 174 million tonne (up 12.4 per cent YoY while down 7 per cent QoQ) with ASP and EBITDA/tonne at Rs 1,887 (down 2 per cent QoQ) and Rs 468 (down 17 per cent QoQ) respectively.

The company also declared first interim dividend for FY24 at Rs 15.25 per share and fixed November 21, 2023 as the record date for the same.

Meanwhile, in an exchange filing on November 2, Coal India had said, in the seven month span of the current financial year the compaby’s supplies to power sector have risen to 346 MTs, a 15 MT increase over 331 MTs in the same period a year ago, registered 4.5 per cent growth.

The quantum supplies to power sector were 4.7 MTs more than the progressive commitment of 341.3 MTs till October. Coal India said it feels confident of breaching the annual supply target of 610 MTs to power sector.

Power demand usually reaches its peak in May due to summer heat waves; however, comparatively drier monsoons and high economic activity kept the demand elevated in Q2, which usually is a slow quarter.

Power demand surpassed the CE Authorities target, with peak demand surging beyond 240 GW in 2QFY24, consequently, driving the demand for thermal power.

Considering the huge demand from the power sector, Coal India has maintained its FY24 target dispatch to the power sector at 610mt.

Ministry of Power has set FY24 electricity generation target at 1,750bu (growth of 7.2 per cent YoY) of which, the share of thermal power is expected to be over 75 per cent. This augurs well for Coal India to achieve strong coal production in the next few years, said analyts at Motilal Oswal Financial in a result update.

In line with the strong performance, improved outlook on volume, e-auction premiums, and lower costs, the brokerage has increased its EBITDA estimates by 16 per cent/13 per cent for FY24/FY25.