Now Reading: Coal India shares fall 4% on weak Q1 results
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Coal India shares fall 4% on weak Q1 results
Coal India shares fell 4.06% to close at ₹410.15 on Tuesday after the state-run miner reported a marginal 0.7% rise in consolidated net profit to ₹8,849.81 crore for the June quarter. Total…
The Story in Brief
Coal India shares fell 4.06% to close at ₹410.15 on Tuesday after the state-run miner reported a marginal 0.7% rise in consolidated net profit to ₹8,849.81 crore for the June quarter. Total income rose 8% but total expenditure grew 12% year-on-year, leading to weaker operating performance and lower-than-expected realisations, brokerages said.
Jefferies maintained a buy rating with a ₹500 target, citing a likely recovery in power demand from a weak monsoon that could aid Coal India's volumes in FY27. Citi and JPMorgan retained neutral ratings with targets of ₹430 and ₹435 respectively, flagging muted volume trends and cost headwinds from a potential wage revision in FY27. Morgan Stanley kept an equal-weight rating with a ₹420 target, noting weak operating numbers and cutting EBITDA estimates.
The Indian Opinion
The sharp 4% drop in Coal India's stock after its Q1 results shows that markets are looking beyond the headline profit figure. The real story is the 12% jump in expenditure, which squeezed margins and disappointed brokerages. While Jefferies remains bullish, betting on a weak monsoon to boost power demand and volumes, Citi and JPMorgan are cautious. A key test will be the September quarter: if coal stocks at power plants fall to 24-30 million tonnes as forecast, it could support Coal India's pricing power and justify the buy ratings.
Sources (2): thehindubusinessline.com, economictimes.indiatimes.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
