Coal India hits record high

Shares of Coal India have moved higher by 2% at Rs 429, also their record high on the National Stock Exchange (NSE). In the past two trading sessions, the stock was up 5% compared to a 1% rise in the CNX Nifty.

Sanjay Jain & Dhruv Muchhal, analysts at Motilal Oswal Securities, have recommended a ‘buy’ rating on the stock with a target price of Rs 448.

Given that Coal India’s volume growth may still be robust, the allocation to more remunerative non-power sector may go up—a key positive for Coal India, analysts said in a report dated June 25, 2015.

We model share of power sector in the total dispatch to inch up from 76% in FY15 to 80% by 2020. Every ton of switch-in tonnage from power to non-power will bring in a benefit of around Rs 1,000/ton, the report added.

Meanwhile, Coal India has become the most valuable public sector undertaking (PSU) company overtaking Oil and Natural Gas Corporation (ONGC) in terms of market capitalization (m-cap). Coal India with Rs 269,235 crore m-cap stands at top of the PSU m-cap ranking surpassing ONGC, which had a m-cap of Rs 266,504 crore at 1157 hours, according to BSE data.

At 1202 hours, the shares of Coal India were up 1% at Rs 426 on the NSE. The trading volumes on the counter more than doubled, with a combined 4.7 million shares changing hands on the NSE and BSE so far.