Motilal Oswal is bullish on Coal India recommended buy rating on the stock with a target price of Rs 285 in its research report dated May 07, 2023.
Motilal Oswal’s research report on Coal India
COAL’s 4QFY23 revenue was up 17% YoY and 9% QoQ at INR382b, largely in line with our estimate of INR363b, driven by high volumes and realizations. ASP grew YoY for all categories, while blended ASP rose 13% YoY and 2% QoQ to INR1,877/t. E-auction ASP jumped 86% YoY to INR4,525/t (down 10% QoQ). E-auction premium eased to 192% from an all-time high of 329% in 2QFY23 and 241% in 3QFY23, but it was still above the historical average. Adjusted EBITDA (net of OBR) was down 31% YoY and 23% QoQ at INR86b. The EBITDA miss was a result of higher provisions of INR59b toward NCWAXI wage provisions, which led to an increase in employee expenses to INR170b against our estimate of INR135b. Excluding the provisions, adjusted EBITDA would have been in line with our estimate at ~INR120b. APAT fell 18% YoY and 28% QoQ to INR55b, below our estimate of INR87b.
Outlook
We retain our BUY rating with a TP of INR285, valuing the stock at 5x FY24E EV/EBTIDA. COAL remains our top pick in the metals and mining sector. At CMP of INR237, the stock trades at an inexpensive valuation of 3.9x FY24E EV/EBTIDA.
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Coal India – 08 -05 – 2023 – moti