On Thursday, the price of shares of state-owned Coal India rose five per cent to Rs 170 in intraday trading. In this way, it crossed its previous 52-week top level of Rs 164.90 on BSE (Coal India stock price hits 52-week high). During the last one month, a rally of 27 percent has been registered in this stock. While the Sensex has registered a rise of 7 percent during this period.
Coal India shares shine due to increase in demand for electricity
Coal India dominates the country’s coal mining sector and there is no visible change in it in the near future. Despite the opening of the coal sector to the private sector, the supply of Coal India will continue to dominate the Indian market. Coal India’s June quarter (2021-22) results show that Coal India has benefited from recovery in power demand. The increase in demand for electricity has led to an increase in coal shipments. The company has profited from this rapid in loading of coal. Compared to the June quarter of the last financial year (2021-22), Coal India’s earnings have grown by 64 percent, it has increased to Rs 4,600 crore.
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Coal India’s profit expected to increase by more than 24 percent
Brokerage firm Motilal Oswal Financial Services believes that in the financial year 201-22, the profit of Coal India may increase by more than 24 percent compared to the previous financial year (2020-21). In the near term, an increase in the capex run-rate can also be seen. But increase in coal shipments and increase in income will lead to increase in cash generation. The demand for Coal India’s coal is increasing continuously. In the first quarter of the financial year 2021-22, there has been a 33 percent increase in coal shipments as compared to the first quarter of the previous financial year (2020-21). Operating leverage will play an important role in the financial year 2021-22.
The annual report of Coal India 2020-21 states that under ‘Vision 2024’, the company’s production will be 1 billion tonnes during 2023-24 so that the country’s coal needs can be met. To fulfill this goal, the company has started work on identifying its major projects and resolving the issues related to them.
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