Strong visibility over growth, costs drive up CIL stock to record high

The e-auction premium over the fuel supply agreement (FSA) price has improved to between 80-100 per cent which means higher blended realisation compared to June-July premiums of around 60 per cent

The share price of Coal India Limited (CIL) hit a multi-year high on the basis of strong recommendations and good numbers for the Index of Coal Industry in November. The public is increasing sector coal mining major production and it is ahead of target. There is clear visibility now about the impact of the wage bill after prolonged negotiations, which enables investors to assess future costs with accuracy. There are cost-control initiatives including the intention to lower employee count by 5 per cent annually. The closure of non-profitable mines should also drive margin improvements.

There is strong production guidance of