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The shares of the company Coal India Ltd hit a high of Rs 164.45 in 52 weeks as they rallied 5 per cent on Bombay Stock Exchange (BSE) intraday trade on Friday, amid expectation of improvement in earnings forward.
On February 26, 2021, the stock of the state-owned company was surpassed its previous high of Rs 162.95. In the past two weeks, the stock has outperformed the market by gaining 12 per cent compared to a 2.2 per cent rise in the S&P BSE Sensex. Coal India has regained Coal India regain the market capitalisation of Rs 1 trillion. In the morning, the stock was up 4 per cent at Rs 163, with a market capitalisation of Rs 1.01 trillion, the BSE data shows.
Coal India reported a strong offtake in dispatches, with volumes at 55.1mt, registering a 37.6 per cent year-on-year (YoY) increase in May 2021. For the first two months of FY22, Coal’s offtake remains higher by 38 per cent YoY at 109.1mt. Offtake growth in May 2021 comes on the back of a 15 per cent rise in coal-based generation (based on initial data from POSOCO) amid a 7 per cent rise in overall power demand and re-stocking of inventory at power plants (up to 5mt MoM).
“With a recovery in demand, e-auction premiums and realizations have shown signs of an improvement. We expect this to eventually seep in (given some lag between allocation and dispatches) and improve as inventory levels at Coal’s mines reduce. The global thermal coal prices have been on an uptrend, which is encouraging for e-auction realizations,” analysts at Motilal Oswal Securities said in a stock update.
Stock Covered in the news
