COAL INDIA IS A BUY FUNDAMENTALLY , TECHNICALLY AND ACCORDING TO DERIVATIVE ANALYSIS.
Fundamental Aspect:
“CIL’s consolidated net sales grew 12.9percent YoY to Rs173.3bn primarily on account of a 9.2percent YoY growth in sales volume to 120.1mn tonnes. Production grew 2.4percent YoY to 117.4mn tonnes. E-Auction and non-coking beneficiated coal realisations came in much higher-than-expected at Rs2941 per tonne (up 19.5percent QoQ) and Rs1718 per tonne (up 38.6percent QoQ) while FSA sales realisation came in lower-than expected at Rs1232 per tonne (down 3.8percent QoQ). This could be due to higher grade coal being e-auctioned and beneficiated. E-auction sales volume declined 8.7percent YoY to 10.48mn tonnes.”
“CIL’s consolidated EBITDA came in lowerthan expected at Rs42.9bn, down 5.7percent YoY on account of higher-than-expected power & fuel costs (higher diesel prices), welfare expenses, contractual expenses and other expenditure. EBITDA margin declined ~490bps YoY to 24.8percent. CIL’s consolidated adjusted PAT came in higher than expected at Rs43.8bn, up 8.7percent YoY on account of higher non-operating income at Rs23.6bn, up 27.2percent, lower depreciation and lower tax rate at 29.5percent, down 170bps YoY. Higher non-operating income was on account of increase in both interest income and transportation recovery charges.”
“With earnings estimates, and quarterly rollover of our 1 year forward DCF value, my 1 year target price for CIL is Rs400. My target price implies a potential upside of 25.6 percent from the CMP.
Technical Aspect:
Coal india has formed a morning doji star candle pattern , whereas the previous candle being a hammer with a RSI of 25and Coal india is trading below the lower tip of the bollinger band.OBV, William,s % R, StochRSI.
Derivative Analysis:
We can see short covering in the futures contract of Coal India for the month of March series.
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COAL INDIA is up 10 %..It is an ideal time to book profits which we bought @ 298..CMP @ 380..Already given us handsome return..I would even advice to short COAL INDIA @ CMP..according to me a new low will be formed in coal india around 200..at that time it will become a buy.
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