Stock Market

Coal India: This PSU stock can cause loss, why brokerage advised to sell, reduced target

Coal India stock has lost 25 per cent from its 1-year high. Even after a significant fall from the high level, the brokerage house believes that there may be further weakness in this stock.

Coal India Stock Price: A declining trend is being seen in the stock of state-owned metal company Coal India. During the last 1 month, the stock has weakened by about 15 percent. At the same time, it has broken 25 percent from its 1-year high. Even after a significant fall from the high level, the brokerage house believes that there may be further weakness in this stock. Brokerage house Goldman Sachs has given a sell opinion in the stock. At the same time, the rating of brokerage house Citi is neutral for the stock. Both the brokerage houses have already cut the target for the stock. The brokerage house believes that the company may face some structural challenges in the recent past.

Challenges facing the company

Brokerage house Goldman Sachs has given a sell advice on Coal India. The brokerage house has reduced the target for the stock from Rs 165 to Rs 140. The current price of the share is Rs 153. The brokerage house says that Coal India needs heavy capital expenditure further, which will further affect the company’s profits. The brokerage house also believes that the company will face some challenges as the company shifts to renewable based power generation. At the same time, ESG concern will also have an impact on the stock.

Stock rerating is not easy

Brokerage house Citi has given neutral rating in the stock. The brokerage house says that the e-auction premium has remained muted in Q2. Coal supply has been better than before, so for the time being the upside will remain in a limit. Rerating of stock is not easy due to ESG concern. The brokerage house has reduced the target price for the stock from Rs 185 to Rs 160. On the other hand, brokerage house ICICI Direct has also given a target of Rs 160 keeping the hold rating.

25% weaker than 1-year high

Coal India’s stock has weakened 25 percent from its 1-year high. The 1-year high for the stock is Rs 204. At the same time, the stock has fallen 15 percent in 1 month. On the other hand, talking about this year so far, the stock has seen a rise of 12 percent and 23 percent in the last one year.

2937 crore profit for Coal India

Public sector company Coal India has made a profit of 2937 crores in the September quarter, as against 2948 crores in the same quarter a year ago. The company’s income increased to Rs 23,291 crore as against Rs 21,153 crore in the same quarter of the previous financial year. The total expenditure of the company has increased to Rs 20,425 crore. The company’s production during this period increased to 125.8 million tonnes, from 114.9 million tonnes in the same period a year ago.

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