Good Feb volumes not enough, power sector demand key for Coal India stock

Pressure on e-auction premiums, subdued outlook on prices and stake sale overhang remain key concerns

Even as the markets remained choppy on Monday, a decent growth in February coal volumes lifted Street sentiment towards Coal India’s stock, pushing it up by over a per cent. On Tuesday, too, the stock gained over 5 per cent, partly aided by the rebound in leading indices. 

These gains are not surprising, given that the stock had fallen to its all-time intra-day low of Rs 165 a fortnight back. This was because of weak coal prices since mid-January this year. 

Given the subdued outlook on prices and stake sale overhang, the near-term upsides may be limited. This is despite 23 of