This Maharatna company rallied 32% in four sessions; here’s why

At a time when domestic bourses are reeling under high volatility amid simmering tensions between Ukraine and Russia, Coal India, the country’s largest coal producing company, has outperformed the benchmark indices. Shares of Coal India have rallied 32% over the last four sessions as compared to 2.8% rise in the BSE Sensex.

The surge in Coal India share price was supported by rising coal prices amid a crisis in global energy markets created by Russia's invasion of neighbouring Ukraine last week. Adding to it, robust production and offtake data for February also boosted stock price.

On Thursday, Coal India shares opened higher at ₹190 and gained as much as 7.11% to hit an intraday high of ₹198 against the previous close price of ₹184.85. On the volume front, 20.65 lakh shares worth ₹39.5 crore changed hands over the counter as compared to the two-week average volume of 10.59 lakh stocks. The market capitalisation of the maharatna company rose to ₹1.19 lakh crore. It hit a 52-week high of ₹203.85 on October 6, 2021, and a 52-week low of ₹123.45 on April 19, 2021.

The largecap stock was trading higher than 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. The stock has risen 30% over the past one week, 20% in one month and 32% since the beginning of the calendar year 2022. In the last one year, shares have climbed 25%, while it delivered a negative return of 17% and 40% over 3-year and 5-year period, respectively.

Most analysts have recommended a ‘buy’ call on the PSU stock with an average target price of ₹192.50. The consensus estimate indicates an upside of 4.1% from the last closing price of 184.85.

IIFL has a buy call on Coal India with a target price of ₹192, while Anand Rathi has assigned buy with a price of ₹200. Prabhudas Lilladher has also recommended accumulate rating on the coal miner with a target price of ₹192 in its research report dated March 2, 2022.

For the third quarter ended December 2021, the state-run company posted a 48% rise in consolidated net profit at ₹4,558 crore, compared to ₹3,085 crore in the year-ago period. The consolidated revenue from operations increased 20% to ₹28,434 crore from ₹23,686 crore in Q3FY21. The company's board approved payment of interim dividend of ₹5 per share.

During the October-December quarter, coal production rose to 163.82 million tonnes (MT) from 156.78 MT in the same quarter of the prior year. The offtake of raw coal also surged to 173.77 MT, from 154.46 MT in the year-ago period.

As per latest data from the company, production in February 2022 rose to 64.3 MT as against 61.9 MT in the year ago period, registering a growth of 3.9%. Offtake also jumped 12% YoY to 57.4 million tonnes in February 2022. On a year-to-date basis, coal production has climbed 5.3% on a YoY basis, while offtake during the April-February period surged 16.6%.