Should you buy, hold or sell this Maharatna PSU stock?

Shares of Coal India (CIL) are in focus in Wednesday's trade after global brokerage Morgan Stanley initiated its coverage on the counter with an 'overweight' call. In the previous day's trade, the Maharatna company stock ended with a drag of over 1 per cent at Rs 411.6.

Upon the coverage initiation by the global brokerage, shares of the company in today's trade scaled over 2 per cent at day's high to Rs 221.15 per share.

The company's stock over the last one year has gained 23.6 per cent, while in the last one month has corrected by nearly 11 per cent against Nifty's gain of just 0.06 per cent.

On the stock, the brokerage has given a target of Rs 525 per share, implying gains of over 27 per cent from the previous close.

The brokerage believes the company willl emerge as the key beneficiary of the power demand upcycle. Furthermore, strong demand for power bodes well for coal.

Also, volumes at the company will prove to the key earnings driver over the medium term. In addition, strong balance sheet will support investments.

Coal India production in October

In the previous October month, the coal offtake was at 61.4 million tonnes, down 0.5 per cent year-on-year.For the period from April 2024 to October 2024, CIL's coal production and coal offtake was 403.8 million tonnes (up 2.5% YoY) and 428.5 million tonnes (up 1.5% YoY).

Coal India Q2 results

The coal major reported 4.1 per cent rise in consolidated net profit to Rs 10,959.47 crore in Q1 FY25 from Rs 10,528.03 crore in Q1 FY24. Revenue from operations rose 1.59 per cent to Rs 36,464.61 crore in the first quarter of FY25 from Rs 35,893.21 crore recorded in the same period last year.