The brokerage firm Motilal Oswal has reiterated its ‘Buy’ rating on Coal India. The company is one of the major players in the Indian mining sector. The firm has also set a target price of Rs 480, highlighting a potential upside of 28% from the current market price of Rs 376.
According to the brokerage, the company’s strong quarterly results, the favorable e-auction performance, and the growth initiatives are key factors primarily driven for this rating.
3 reasons why Motilal Oswal has ‘Buy’ rating on Coal India
Let’s take a look at the three key reasons why the brokerage firm has reiterated its ‘BUY’ rating on Coal India:
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According to the brokerage firm report, Coal India’s performance in Q3FY25 was steady, driven by strong volumes and higher e-auction premiums.
The company reported a revenue of Rs 358 billion, a slight dip of 1% YoY but a healthy 17% growth QoQ. Moreover, this was in line with the brokerage firm estimates.
The company’s e-auction revenue surged by 38% sequentially to Rs 51 billion. The realised price of Rs 2,671 per tonne represents a 76% premium. “The strong performance in e-auctions has significantly boosted Coal India’s profitability,” added the company in its report.
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This higher realisation supports the overall profitability and makes the stock an attractive option for investors.
2. Focus on expansion and diversification
The brokerage firm further highlighted Coal India’s focus on expanding its coal washer capacity, which will boost its market share in both coking and non-coking coal.
“Coal India’s strategic focus on expanding its operations and diversifying into new growth areas makes it well-positioned for future growth,” added Motilal Oswal in its report.
As per the firm, these long-term initiatives ensure that Coal India can maintain a competitive edge in the sector. Moreover, the management is also focusing on coalmine expansions,
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