Coal India Shares Experience Notable Rise Following Strong Q4 Results
In a positive turn of events for investors, Coal India’s share price jumped by 1.98% during early trading on Thursday. This surge came after the company disclosed impressive financial results for the March 2025 quarter. Opening at ₹390.95 per share, up from the previous close of ₹383.30, the momentum appears driven by solid profit growth and strategic financial decisions.
Strong Profit Growth in Q4 FY25
On Wednesday, Coal India announced a significant achievement: its consolidated net profit rose by 12%, reaching ₹9,593 crore in the fourth quarter of the 2024-25 financial year. This was an increase from ₹8,530 crore during the same quarter the previous year, showcasing the company’s resilience in a fluctuating market.
- Net Profit: ₹9,593 crore (up from ₹8,530 crore YoY)
- Revenue from Operations: ₹37,825 crore (down 1% from ₹38,213 crore YoY)
Despite the profit increase, the company reported a slight dip in operational revenue. The Board proposed a final dividend of ₹5.15 per share for FY25, aligning with investor expectations.
Expenses and Production Insights
Total expenses for the March 2025 quarter increased modestly to ₹29,057 crore, compared to ₹28,950 crore in the same period last year. Notably, Coal India’s raw coal production dropped to 237.69 million tonnes, reflecting a 1.7% decrease from 241.75 million tonnes in Q4 FY24.
Expert Analysis on Coal India’s Performance
According to Amit Lahoti, Senior Research Analyst at Emkay Global Financial Services, Coal India’s Q4FY25 EBITDA reached ₹132.9 billion, exceeding expectations. Lahoti highlighted several factors contributing to this solid performance:
- E-auction premiums were better than anticipated, at 69% versus the estimated 55%.
- Employee costs were lower than expected despite a sequential increase.
- A reduced reversal from stripping activities also positively impacted the results.
The net cash position improved by 5.7% year-on-year, now standing at ₹253 billion.
Investment Outlook: Buy or Hold?
Lahoti maintains a ‘buy’ rating for Coal India shares, with a target price set at ₹475. He noted that the company’s earnings estimates for FY26/27 remain largely unchanged, emphasizing that current valuations are attractive with a one-year forward P/E ratio of 7x, compared to a 10-year average of 9.7x.
Market Resistance and Future Projections
Mahesh M Ojha, AVP of Research at Hensex Securities, mentioned that Coal India shares are encountering resistance at ₹396. A breakthrough above this level could propel the share price towards ₹420.
Investors currently holding Coal India shares are advised to maintain their positions, setting a stop-loss at ₹368. For those looking to enter the market, Ojha suggests initiating purchases at the current price, targeting a quick profit at ₹420, while also adhering to the same stop-loss strategy.
In summary, Coal India’s recent financial performance and strategic decisions position it favorably in the market, making it a stock to watch for both existing and potential investors.
