Coal India shares hit a 52-week high of Rs 164.45, rallying 5% on the BSE during intraday trading on Friday amid expectations of better earnings in the future. The state-owned company shares exceeded their previous high of Rs 162.95, reached on February 26, 2021.
The stock has outperformed the market in the past two weeks, up 12% from a 2.2% gain on the S&P BSE Sensex. A sharp rally in stock prices helped Coal India reclaim a market cap of Rs 1 trillion. According to the BSE, at 09:46, the stock rose 4% to Rs 163, with a market cap of Rs 1.01 trillion.
Coal India reported a significant shipment of shipments, with volumes of 55.1 million tonnes, up 37.6% year-on-year (YoY) in May 2021. by 109.1 million tonnes. The increase in production in May 2021 is associated with a 15% increase in coal generation (based on POSOCO initial data) against the background of a 7% increase in total electricity demand and restocking at power plants (an increase of 5 million tonnes / m).
“With demand recovering, markups and e-auction sales have shown signs of improvement. We expect this to eventually leak out (given some lag between distribution and shipment) and improve as coal mines’ inventories decline. Global thermal coal prices are on an upward trend, which is encouraging for electronic auctions, ”analysts at Motilal Oswal Securities said in an updated stock review.
As sales and sales increase, we see significant operating leverage coming into play. Despite further negative shocks, we expect Coal India’s margins to rebound sharply in fiscal 22 (+ 29% YoY). The recovery in demand and funds from the Atmanirbhara scheme should help allay concerns about stretched receivables, the brokerage firm said.
Meanwhile, Coal India’s board of directors is due to meet on Monday, June 14, 2021 to review the company’s audited financial results for the quarter and year ended March 31, 2021, and to review the final revision recommendations. dividends for 2020-2021 (FY21).