Muted volumes, falling e-auction premiums likely to hurt Coal India

Coal India (CIL) continues to trend lower on the bourses, down more than 13 per cent in July. Muted June quarter offtake, the start of a seasonally weak September quarter, and weakness in international coal prices, have all impacted Street sentiment.  

The government’s announcement in the Budget regarding increased divestment targets will be an overhang on the stock. In addition, the government is planning to auction more than 41 new coal blocks. This is also looked upon with concern, given it may lead to competition for CIL, say analysts. 

The firm’s flattish production and sales numbers for the June quarter is not