Brokerage firm Jefferies believes that the recent correction in shares of Coal India Ltd. offers a good buying opportunity. The brokerage has maintained its “buy” recommendation on India’s largest mining company with a price target of ₹520.
The price target from Jefferies implies a potential upside of 25% from Wednesday’s closing levels.
Coal India’s shares have corrected 14% from their recent peak of ₹487.
Jefferies believes that Coal India’s volume growth trajectory has improved to feed India’s rising power demand. It is factoring in dispatch volumes to rise 8% in the current financial year and then grow at a Compounded Annual Growth Rate (CAGR) of 6% over financial year 2024 – 2026.
Jefferies believes that the big fall in e-auction prices seems largely behind. The auction price premium over linkage coal, which was at 228% at the end of financial year 2023, fell to 117% in the December quarter of …