BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Coal India Ltd.’s Q2 FY22 e-auction premiums have been disappointing. However, the management highlighted that the current premium is over 50% compared to the 15.3% reported in its Q2 FY22 result.
It has re-started e-auction to non-regulated sectors, which should result in improved profitability.
Coal India's management expects the price hike to offset an increase in wages, given the current strong demand environment and high international coal prices.
The stock trades at 3.4 times/3 times FY22E/FY23E enterprise /Ebitda, with an attractive dividend yield of 11%.
A surge in coal demand from the power sector, which could squeeze supplies to non-regulated sectors through e-auctions, remains a key risk as it could hurt profitability.
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