Coal India gains post q4 results; buy, sell or hold - What should investor do with this PSU stock?

Beating estimates, Coal India on Wednesday registered a year-on-year growth of 45.91 percent as it reported a net profit of Rs 6,692.94 crore for the quarter ended March 2022 in comparison to Rs 4,586.78 crore in the corresponding period of the last year.  It clocked a 47.4% jump quarter on quarter basis as the public sector undertaking (PSU) had posted Rs 4,557 crore net profit in October-December quarter.  

Most of the brokerage firms have been bullish on the stocks on back of a strong show put up by the coal company in the quarter ended March as they maintained a buy rating on the PSU stock. The most aggressive target of Rs 265 was given by JP Morgan.  

Global brokerage firm Credit Suisse maintained an outperform rating on Coal India with a revised target price of Rs 250. Saying that the company's FSA realisation has done exceptionally well, it increased the target price from Rs 225 to Rs 250. Global brokerage firm was also bullish as the company has announced attractive dividends and has also seen a decline in receivables.  

Saying the company has presented excellent earnings in Q4FY22 with all-time high figures for quarterly revenue, EBITDA, EBITDA/te and PAT, ICICI Securities increased its target price to Rs 258 from Rs 234 earlier. "This strong performance was despite severe cost pressures, however, the recent cut in diesel prices will ease fuel costs in Q1FY23. CIL now has a much healthier balance sheet at FY21-end. Continued higher demand for domestic coal due to high thermal power PLFs and elevated international coal prices may result in CIL clocking a better FY23," it said.  

Besides, another global brokerage house, JP Morgan maintained its 'overweight' rating with a target price of Rs 265. On Wednesday's closing price of Rs 180.60, it turns out to be an upside of 47%.  

Though Jefferies gave a hold rating, but this brokerage too increased the target price from Rs 160 to Rs 170.  

CITI increased Coal India target price from RS 160 to Rs 180, while Bank of America Securities (Bofa) maintained a buy rating with a target price of Rs 218 per share.  

On Thursday, around 1.45 pm, shares of Coal India were trading with gains of neary 2% to Rs 183.95 per share on the BSE. Despite market volatility and several headwinds, this PSU stock has offered a healthy return of 27% in the past one year as on May 26 to its shareholders.  

Earlier, the board of directors of the company also approved Rs 3 per share dividend subject to shareholder approval in the annual general meeting (AGM).