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Invest in Coal India - Long Term Investment Opportunity

Coal India is Indian Government undertaking and operates in coal segment. Coal India produces around 75 to 80% of India coal requirement with very strong positive cash flow generation capabilities.

For the last many quarter even after good or bad result, coal India share price is range bound between 300 to 340INR.

The negative perception around Coal India should be attributed to suppressed coal price globally but now the trend is changing as China increased Coal import. Consequence of that,global coal price started to move higher after years of lull period.

On a contrary, Coal India came out with very dismal result with lower revenue and profit which failed to meet analyst forecast.

Many investors will get panic as well as may choose to sell Coal India if they have share or bet negatively in F&O market.I was expecting tepid result as rains in coal India operating states disrupted life and production completely which impacted the overall result.

I am expecting profitability and revenue both will look upwards in coming quarter.

We also should not forget that coal India is one of the highest dividend paying company and more or less pays in between 7  to 10% as special bonus dividend on yearly dividend. If Coal India free cash flow generation is good then no one should be worried as government wants to mint money and reduce their fiscal deficit through special dividend or through buyback .

In my point of view, Coal India will be under pressure for next few trading session and offer golden opportunity for long term investor to start accumulating share in small quantity.

I am expecting Coal India to reach around INR 350 to 375 INR region in short to medium term along one should remember about hefty dividend.

Please avoid F&O market.

Please also consult your financial advisor before investing
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About Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.
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