MOSL: MOrning India (29/August/22): 1. Coal India (The black diamond: Once shunned, now sought after); 2. Automobiles; 3. Financials
MOrning India (29/August/22): 1. Coal India (The black diamond: Once shunned, now sought after); 2. Automobiles; 3. Financials
Today’s top research idea
Coal India: The black diamond - Once shunned, now sought after
- We expect global coal demand to remain strong in the near term as the world recovers from the pandemic and Europe shifts to renewables (in the long term) from Russian gas. India's coal consumption is likely to increase and so will its thermal coal imports in the near term. We expect FY23 e-auction premiums to remain in triple digits at least as coal availability for e-auction has reduced drastically with most of the coal being diverted to the power sector.
We have factored in a 15% wage hike in our FY23 numbers along with a 5% natural attrition, leading to a 10% total increase in wage bill, thereby providing cushion to our PAT estimates. COAL trades at 3.0x/4.3x our FY23/24E EV/Adj. EBITDA. We expect a 10% dividend yield at CMP, We raise our FY23/24E Adj. EBITDA by 6%/2%, respectively, and consequently increase our TP to INR290 (from INR275) premised on 4x FY23E EV/EBITDA. Maintain BUY
Piping hot news
Bank credit soars by 15.32%; deposits register 8.84% jump
The Reserve Bank of India (RBI) released on Friday its periodic Scheduled Banks' Statement of Position in India for the fornight ended August 12. According to data from the release, Bank credit in India grew by a significant 15.32 per cent to reach Rs 124.305 lakh crore during the fortnight under review. For the same period, bank deposits rose by 8.84 per cent to Rs 169.49 lakh crore.
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