Rs 5 Dividend: Buy Multibagger Mining PSU For TP Rs 540 After Incorporating New Arm

Axis Direct has issued buy call to large cap Maharatna public sector undertaking Coal India with target price of Rs 540 apiece and maintain stop loss at Rs 465. Axis Direct has issued the buy call for 15 days target time. Earlier, Motilal Oswal also issued buy call to Coal India share with target price of Rs 530 per share. Current market price of Coal India shares on BSE is Rs 491.25 per share. Coal India Ltd share offered eye-catching returns of 104% in last 1-year and 44% in last 6-months.

The PSU on May 2 recommended a final dividend of Rs 5/- per share of the face value of Rs 10/-. Coal India in its latest BSE filing dated May 28 issued an update on the incorporation of subsidiary company Bharat Coal Gasification And Chemicals Limited. More details below:

Coal India Gives Update On Incorporation of Bharat Coal Gasification And Chemicals Limited: The large cap PSU on May 28 declared the incorporation of a subsidiary arm, Bharat Coal Gasification and Chemicals Ltd (BCGCL) for undertaking a coal-to-chemicals business. It is worth mentioning here that CIL holds a majority of 51% stake in the new entity and remaining stake of 49% is possessed by BHEL, according to the exchange filing. Earlier this year in February, CIL inked a joint venture agreement with Bharat Heavy Electricals Ltd (BHEL) for undertaking a coal-to-chemicals business.

Clearance of NITI Aayog and the Department of Investment and Public Asset Management (DIPAM) obtained for the incorporation of the joint venture company between BHEL and CIL, added the BSE filing. "Bharat Coal Gasification & Chemicals Ltd has been incorporated...for coal to chemicals business to produce ammonia and nitric acid as intermediate products and ammonium nitrate as end product," the filing said.

LIC Stake In CIL: Life Insurance Corporation Of India (LIC) has 10.18% stake in CIL as the PSU insurer has 627,589,285 shares of the company. FII/FPI reduced holdings from 8.59% to 8.41% in March 2024 quarter while number of FII/FPI investors rose from 677 to 713 in March 2024 quarter.

Coal India Latest Dividend Announcement: According to May 2, 2024 exchange filing of Coal India, "Board of Directors recommended payment of Final Dividend for the financial year 2023-24 @ 5/- per share of the face value of Rs 10/- as recommended by the Audit Committee of CIL in its meeting held on date subject to the approval of the Members at the ensuing Annual General Meeting ("AGM") of the Company."

Coal India Q4 Results: CIL announced a growth of 26% in consolidated net profit to Rs 8,682 crore for the quarter ended March 2024. Revenue from operations for the January-March 2024 quarter declined 2% year-on-year (YoY) to Rs 37,410 crore as compared to Rs 38,152 crore in the corresponding quarter of last year. On a sequential basis, net profit declined 14% from Rs 10,130 crore declared in the preceding December quarter. Meanwhile, revenue surged 3% quarter-on-quarter (QoQ). Coal India announced its consolidated EBITDA at Rs 11,337 crore for quarter under review and margins came at 30.3%. Total expenses for the quarter under consideration slipped 8% YoY to Rs 28,298 crore as against Rs 30,873 crore declared in the Q4 of last fiscal. For the whole 2023-24, Coal India declared its net profit at Rs 37,402 crore, up 18% as against Rs 31,763 crore announced in FY23.

Coal India Dividend History: Coal India announced 26 dividends since February 18, 2011. In last 12 months, Coal India announced an equity dividend amounting to Rs 24.50 per share. At the current share price of Rs 491.25 per share, Coal India offers a dividend yield of 4.99%.

Coal India Share Performance: The 52-week high price of Coal India share on BSE is Rs 507.30 per share (as on 22/05/2024) and 52-week low price is Rs 223.30 per share (as on 26/06/2023), respectively. Coal India's market capitalisation stood at Rs 3,02,744.03 crore. Coal India shares offered return of 29% year-to-date, soared 154% in last 2-years, and gained 232% in last 3-years.

About Coal India: CIL is a Maharatna company - a privileged status conferred by Government of India to select state owned enterprises in order to empower them to expand their operations and emerge as global giants. The select club has only ten members out of more than three hundred Central Public Sector Enterprises in th e country.

Disclaimer: The stock has been picked from the brokerage report of Motilal Oswal and Axis Direct. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.