Robust growth outlook and recent price hike to support earnings; valuation attractive
Robust domestic demand outlook
Valuation and view
The prospects for COAL remain strong. We estimate COAL’s production to clock a 6% CAGR over FY24-27, with 15% dispatches via e-auction to result in higher NSR and better margins.
The recent stock correction offers an attractive valuation, with the stock trading at 3.3x on FY27E EV/EBITDA, below its 10-year historical average. We reiterate our BUY rating with a TP of INR480/share, valuing the stock at 4.5x FY27E EV/EBITDA. COAL remains our top pick in the sector.