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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