Bull vs Bear: Should you invest in Coal India stock? Zee Business analysis reveals this!

Should you invest in the Coal India Limited shares? Zee Business does a deep dive into what is working for the energy sector stocks and the stumbling blocks. A report by Zee Business research analysts Varun Dubey and Ashish Chaturvedi! 

While Senior Research Analyst Dubey maintains a bearish view on this stock, Chaturvedi takes a contrary view. Here is what they say!

Chaturvedi said the price of Coal India shares was at Rs 150 last time during the same show. The PSU stock has sustained a level above Rs 180 despite the overall markets remaining under pressure. It has already given a dividend of Rs 14 per share. 

The price of coal has seen a significant uptick in the international market and even Indian companies have been giving a premium of 300 per cent to import the coal amid the rising prices of coal in the international market. He expects an upward price revision soon.

Dubey on the other hand said that the news around price hike has been there for almost 10 months now and nothing has come to the fore in this respect. He said that this was one of the biggest issues with the company. He said that the prices have increased only in the international markets and are expected to come down, going forward. 

He said that the story of coal as fuel is not sustainable as there is a shift towards green energy and cited the increase in electric vehicle penetration. He expects that situation will be reversed soon.

Countering Dubey's arguments, Chaturvedi said that the price hike will likely happen as has happened with petrol and diesel prices, which have been increased after remaining still for 137 days. The whole energy segment is going to follow suit, he added.

Even if there isn’t any price hike in future, the company will gain from the 20-25 per cent of revenue which comes from e-auction. The company has reported 100 per cent of booking in its e-Auction segment, he added.

Dubey said fuel supply agreements (FSA) contribute to 70 per cent to 75 per cent of Coal India, and even if the price increase on the international market, Coal India would not be able to increase its prices due to the long duration of FSA.

Coal India is trying to make its business sustainable by getting into the business of coal gasification. It will prove to be a game-changer for Coal India amidst the decreasing popularity of the use of Coal India, Chaturvedi said.

Dubey said that the company distributes 40 per cent of its profit amongst its employee, which is not very beneficial for a company.

Market expert, Kunal Sarogi said that the consolidation on Coal India stock is over and after the war-like situation in Ukraine, the world will now shift its focus on the importance of energy. He said that he supports the bull run on the company.

There will be a chart reversal on the coal in India. As a result, Coal India can reach the levels of Rs 280 to Rs 300 in a year, the analyst said.
For more detail, Watch Full Video Here:-

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