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Buy or Sell: Coal India Share Price Target 2024, 2025, 2030, 2035 Long Term Prediction

HP Jinjholiya

24 August 2024

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Today, we are going to estimate the Coal India Share Price Target 2024 to 2035. Coal India is listed on the NSE under the symbol “COALINDIA” and on the BSE with the code “533278”. let’s analyze the future of Coal India shares as well, including whether it’s a good time to buy or sell them today.

Additionally, we will also take into analysis Coal India Share Recommendations from various brokerage firms, including Target’s High Price, Target’s Low Price and Recommendation at the end of the article.

Overview of Coal India

Keep an eye on Coal India’s share price today with real-time updates, and examine its performance on the stock market through comprehensive charts that display the fluctuations in Coal India stock price.

Coal India Share Price Today

About Coal India Company

In the heart of India’s industrial prowess lies Coal India Limited (CIL), a beacon of the nation’s energy sector. Established in November 1975, CIL has grown from producing 79 million tons of coal in its inaugural year to becoming the world’s largest coal producer. With a workforce of 239,210 as of April 1, 2023, it stands as one of the largest corporate employers globally.

CIL operates through its subsidiaries across eight Indian states, encompassing 83 mining areas. Its portfolio includes 322 mines, comprising 138 underground, 171 open-cast, and 13 mixed mines, alongside managing various institutions like workshops and hospitals.

The company also boasts 21 training institutes and 76 vocational training centres, with the Indian Institute of Coal Management (IICM) serving as a premier corporate training institution.

As a Maharatna company – a title bestowed by the Government of India to only a few enterprises – CIL plays a pivotal role in India’s energy sector. It contributes 85% of the total coal production and 75% of the coal-based thermal power in India, significantly supporting the nation’s primary commercial energy needs.

In a remarkable feat, CIL recorded a production of 703.21 million tons, a 12.94% increase, and achieved its highest-ever dispatch of 694.69 million tons, a 5% increase compared to the previous year. This growth trajectory is expected to propel CIL’s coal production to 1 billion tons by 2025-26.

 Financial of Coal India

Conduct a SWOT analysis of Coal India Share based on its financials. We will break down the key elements of strengths, weaknesses, opportunities, and threats using the financial data.

Strengths–

Robust Revenue Growth: Coal India has shown a consistent increase in total revenue over the years, moving from ₹829,142.6 crores in 2020 to ₹1,306,415.5 crores in the trailing twelve months (TTM) as of March 30, 2023. This indicates a strong market presence and operational efficiency.

Healthy Gross Profit: The company’s gross profit has been on an upward trajectory, indicating effective cost management and a solid business model.

Stable Net Income: The net income for common stockholders has shown resilience and growth, particularly a significant rise from ₹126,998.9 crores in 2020 to ₹280,595.9 crores in TTM, reflecting strong financial health.

Solid Asset Base: With total assets growing from ₹1,500,215.1 crores in 2020 to ₹2,112,066.5 crores in 2023, Coal India exhibits a robust asset foundation.

Weaknesses–

High Operating Expenses: There’s a noticeable increase in operating expenses over the years, which could impact profit margins if not controlled effectively.

Capital Expenditure: The company has a significant capital expenditure, which is essential for its operations but also indicates a substantial cash outflow.

Fluctuating Net Interest Income: The net non-operating interest income expense shows fluctuations, which might indicate varying financial strategies or market conditions impacting financial income and expenses.

Opportunities–

Expanding Market Demand: With the growing energy needs in India, Coal India has the opportunity to expand its market share and increase revenue.

Diversification: Exploring renewable energy sources and diversifying its portfolio could open new revenue streams and reduce dependency on coal.

Technological Advancements: Investing in modern mining technologies can improve efficiency and reduce operational costs.

Threats–

Environmental Regulations: Stricter environmental regulations and a global shift towards cleaner energy sources could impact coal demand.

Market Competition: The entry of private players and alternative energy sources could intensify competition.

Economic Fluctuations: Economic downturns and fluctuations in global markets can impact coal prices and demand.

An effective method for evaluating the Coal India share price Target is by examining research reports and analyses conducted by reputable financial institutions and brokerage firms. The latest research reports are available on Coal India.

We will analyze the performance of the company’s shares in recent times and provide you with a well-researched Coal India Share Price Target 2024, 2025, 2030 to 2035 based on our Research knowledge and forecasting.

Coal India Share Price Target 2024

The financial services firm Motilal Oswal published the latest research report on Coal India Share Price Target, assigning a ‘buy’ rating with a share price target of Rs. 430 from its current market price of Rs. 366.

Robust Volume Growth

COAL’s commitment to volume growth is critical in meeting the burgeoning demand for coal in the power sector. This demand is driven by the government’s emphasis on ensuring a reliable 24×7 electricity supply.

COAL’s long-term commitment, evident through Fuel Supply Agreements (FSAs), positions it to target a production of 780 million tonnes (mt) in FY24, with a further increase to 850mt in FY25.

E-Auction as a Performance Catalyst

Approximately 10% of COAL’s total volume is sold through auction-determined prices. The e-auction segment is expected to sell around 72mt in FY24, showing a gradual increase over the following years.

Notably, the e-auction premium has rebounded recently, indicating a resurgence in demand and a rise in international prices. This premium is anticipated to hover around 80-100% in the upcoming months, contributing significantly to COAL’s revenue.

Capital Expenditure

COAL has escalated its capital expenditure (capex) to enhance its evacuation infrastructure. From a modest INR 65-85 billion until FY20, the capex soared to INR 186 billion in FY23. With an earmarked ~INR 165 billion capex for FY24, COAL is set to develop its infrastructure across various verticals.

This robust capex strategy is expected to exceed budget estimates, further bolstering the company’s growth trajectory.

Supply to Power Sector

COAL supplies about 90% of its production to the power sector, including Captive Power Plants (CPPs). The ongoing commitments via FSAs and Bridge Linkage Commitments (BLCs) ensure steady sales, projected to be around 610mt in FY24E. Dispatches to coal-fired plants are also on an upward trend, providing a clear growth trajectory.

Growing Railway Capacities

COAL is investing in enhancing its railway capacities and First Mile Connectivity Projects (FMCP). These initiatives are poised to augment its evacuation capacity significantly, ensuring higher volumes and operational efficiencies. The strategic expansion in railway connectivity and FMCPs underlines COAL’s commitment to improve its logistical framework and cost efficiencies.

Cost-Control and Productivity

A significant aspect of COAL’s strategy is its focus on cost-control and increasing productivity. The company has been proactive in phasing out unviable mines and reducing its workforce, contributing to a leaner and more efficient operational model.

Long-term Visibility

The dependence on thermal power plants is expected to increase in the coming years, despite the growth in renewable energy capacities. COAL, given its pivotal role in the thermal power sector, enjoys long-term growth visibility, underpinned by the government’s target for electricity generation and the anticipated increase in thermal power capacity.

Forecast and Analysis

Based on these strategic moves and market trends, COAL is forecasted to maintain stable volume growth. The stock currently trades at an EV/Adj. EBITDA of 4.2x for FY26E. Rolling forward our estimates to FY26, we reiterate our BUY rating on the stock with a target price (TP) of INR 430, premised on 5x FY26E EV/EBITDA.

Coal India Share Price Target 2025

For Coal India’s share price target for 2025, we believe it should be in the range of ₹500-₹550. This is because the company is expected to sell around 88mt through e-auctions in FY26, which will propel its performance. Additionally, the company’s revenue is expected to improve in line with the increase in volumes, and its adjusted EBITDA is expected to grow at a healthy pace after bottoming out in FY24E.

Coal India Share Price Target 2030

For Coal India’s share price target for 2030, we believe it should be in the range of ₹800-₹900. This is because the company is well placed to capitalize on the growth opportunity ahead, as domestic power demand is expected to grow at 1.1x GDP and reach 1,750bu of power generation in FY24. Additionally, the dependence on thermal power plants is expected to mount in the coming years, which will drive higher thermal coal demand from Coal India.

Coal India Share Price Target 2035

For Coal India’s share price target for 2035, we believe it should be in the range of ₹1,200-₹1,400. This is because the company is expected to continue to perform well in the mining sector, and its revenue and adjusted EBITDA are expected to grow at a healthy pace. Additionally, the company’s cash and cash eq. per share is expected to remain elevated, which will provide a strong foundation for future growth.

Competitors of Coal India

How to Buy Coal India Share

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I would like to remind you that I am not authorized by SEBI to provide any financial advice or recommendations. As you know, Share price prediction is not an exact science, That’s why I am conducting in-depth research and using different AI tools to predict share prices. My purpose is only educational, and I am using AI to see what the future of the stock might look like.

Disclaimer– These Share Price Targets for “Coal India Share Price Target” are only provided for informational purposes only. It does not constitute a recommendation to buy, sell, or hold Coal India stock. Investors should conduct their own research and analysis and consult with financial experts before making any investment decisions— Sharedhan.com