INSUBCONTINENT EXCLUSIVE:
Edelweiss Financial Services has a buy call on Coal India with a target price of Rs 325.
The current market price of Coal India is Rs
235.70.
Time period given by brokerage is one year when Coal India price can reach defined target
continued to pile up for second successive month
Going ahead, we expect SECL to contribute to production as well as off take as operating issues have waned
Hence, we expect CIL to meet our 5.5 per cent YoY offtake growth estimate in FY19
This is expected to increase coal availability in ensuing months
We expect production uptick as our channel checks indicate that local issues at SECL have been resolved
Going by YTDFY19 volume growth of 5.5 per cent, we do not see risk to our FY19 offtake estimate of 613mt (5.5 per cent YoY growth).
Imports
have not inched up despite lower e-auction volumes: Our channel checks indicate that bulk of coal has been diverted to regulated sector
Hence, we expect e-auction volumes to dip to below 10mt in Q3FY19
Despite this, imports declined in November possibly due to likely erosion in e-auction premium.
Outlook and valuations- Volume estimate
Going ahead, we expect production at SECL to pick up and see no threat to our FY19 volume estimates
