Coal India crosses Rs 300 mark after five years; here is what propelled the rally

Coal India share price: State-run Coal India crossed the crucial Rs 300 level on Tuesday, October 10, after five years and clocked a 52-week high at Rs 303.7 apiece. The last time the stock hit the Rs 300 mark was on May 28, 2018. The buying interest in the stock came after brokerage firm Nuvama said in its latest report that Coal India (CIL) is a pure domestic play potentially offering the triple benefits of volume growth, improved e-auction prices, and possibly an all-time high dividend in H2FY24.

"With the monsoon receding and hydro/wind generation falling, demand for thermal power is set to rise further in H2FY24. The rise in global coal prices coupled with an uptick in industrial activity pushed up the e-auction premium to 106 per cent in Sep-23 from 54 per cent in Jun-23," the brokerage said in its report.

At close, shares of Coal India ended at Rs 302.7 apiece, up 5.23 per cent. The stock snapped the two-day losing streak, and its market capitalisation stood at Rs 1,86,360.9 crore.

The brokerage has revised its target on the stock to Rs 389 apiece from Rs 361 apiece with a 'buy' call.

As per Coal India's regulatory filing, in H1FY2024, the company produced about 333 million tonnes (MTs) of coal, ending the first half of the current financial year with a strong 11.3 per cent year-on-year (YoY) growth.

This was nearly 34 MTs higher compared to the same period in FY 2023. All CIL’s producing subsidiaries clocked growth.

Output for the month of September 2023 was 51.4 MTs, a growth of 12.6 per cent.

Coal India share price: Past performance

In 2023 so far, shares of Coal India have gained over 34 per cent against Nifty 50's rise of over 8 per cent.

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