Coal India Receives Buy Rating, Target Price Set at Rs 515: Prabhudas Lilladher

Coal India Reports 8% YoY EBITDA Growth, Raises FY27/28E Estimates

Coal India (COAL) has reported a significant improvement in its earnings, with EBITDA (ex-OBR) reaching INR123 billion in the latest period. This represents an 8% year-over-year (YoY) growth, marginally exceeding both the research firm's and consensus estimates. The improved performance can be attributed to cost efficiencies and a higher share of e-auction sales. In light of these results, Prabhudas Lilladher has raised its FY27/28E EBITDA estimates by approximately 2%, factoring in stronger e-auction realizations.

The research firm now values the stock at 5.5x FY28E EV/EBITDA, which is in line with its 10-year historical average. As a result, they have upgraded their rating to 'Accumulate' from 'HOLD', with a revised target price of INR515 (earlier INR436). Additionally, Coal India declared a dividend of INR26.55/share for FY26, representing a 53% payout and a yield of approximately 6%. The company is expected to experience modest volume growth of 2/3% YoY, accompanied by EBITDA (ex-OBR) growth of 16%/7% YoY for over FY27/28E.

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Coal India remains well-positioned to capitalize on sustained strength in power demand, with approximately 80% of its volumes linked to coal-based power generation. This strategic advantage is expected to drive future growth and profitability for the company.