Coal India's share price fell 3.5%, with February production down 0.8%. A March production target of 142 MT remains unchanged. Morgan Stanley cited the offtake decline as 'negative' but maintained its target price of ₹525.
Coal India Share: Shares of Coal India Ltd., India's largest coal mining company, fell 3.5% on Monday, March 3rd, following the release of February business data.
Coal India's Production and Offtake Decreased in February
The company's total production in February 2024 was 74.1 million tonnes (MT), a decrease of 0.8% year-on-year. Cumulative production for FY24-25 stands at 695.3 million tonnes, representing a 1.5% year-on-year increase.
However, this represents only 83% of Coal India's FY25 target of 838 million tonnes. The company now needs to produce 142 million tonnes in March to meet its annual target.
Furthermore, offtake (dispatches) in February decreased by 4.8% to 62.1 million tonnes. Cumulative offtake for the fiscal year to date is 693.4 million tonnes, indicating a mere 1.3% year-on-year growth.
Morgan Stanley Highlights Significant Negative Factor
Brokerage firm Morgan Stanley described the decline in Coal India's offtake as a "significant negative signal".
- The company attributed the production impact to weak demand in the power sector.
- Excess stock inventory may also be affecting offtake.
- A lack of improvement in business activity could impact Coal India's Q4 earnings and FY26 performance.
Despite this, Morgan Stanley maintained its "Overweight" rating on Coal India and a target price of ₹525, implying a potential upside of 46% in the share price.
Current Status of Coal India's Share Price
Coal India's share price closed at ₹357.35 on Monday, down 3.3%. This represents a 35% decline from its recent high of ₹543.
Among 24 analysts covering Coal India, 18 recommend a "Buy" rating, 4 suggest "Hold," and 2 recommend "Sell".
