Moderate valuation, high dividends should provide floor to Coal India stock

Global slowdown leading to lower prices, fall in e-auction volumes and higher-than-expected wages are downside risks

Public sector major Coal India’s results disappointed the markets. At the consolidated levels, the profit after tax (PAT) for the second quarter of financial year 2021-22 (Q2FY22) was Rs 2,937 crore, down marginally from Rs 2,948 crore in Q2FY21. Revenue from operations increased to Rs 23,291 crore, compared with Rs 21,153 crore last year. Expenses also rose to Rs 20,424.5 crore, against Rs 18,177.8 crore in Q2FY21.

The Ebitda (earnings before interest, taxes, depreciation, and amortisation) for Q2 was Rs 4,441 crore, versus Rs 4,643 crore a year ago. Ebitda margin dropped to 21 per cent from 24 per cent last