coal India poised to give a minimum return of 24% in next 2 year
# Those buying Coal India around 146 level could generate Rs 35 in dividend income in next 2 years (including the recent announced 3.5/- dividend). That comes to roughly 24% return on investment.
# plus there is potential for upside from appreciation in stock price due to following reasons:
1. Production Increase due to front loading of capex
2. wage revision and consequent pass on of costs to buyers in next 6 months
3. higher auction sales and realization
# Valuation wise the company is trading at a shiller pe of just 6.5 times which suggest that the company has earned its market cap in last 6.5 years itslef on average 10 year profit of 13843 crores. So if the stock is held for around 7 years, it is likely to earn it 90000 crore market cap again plus the future value will still be there in the stock price.
# Its probably ESG theme which is keeping global investors away from this stock. But Coal being an essential commodity in 70% of Indian power generation, it is unlikley to be replaced any soon.
# With Banks FDs generating just 6% return, the earning yield on Coal India is a very attractive proposition.
# plus there is potential for upside from appreciation in stock price due to following reasons:
1. Production Increase due to front loading of capex
2. wage revision and consequent pass on of costs to buyers in next 6 months
3. higher auction sales and realization
# Valuation wise the company is trading at a shiller pe of just 6.5 times which suggest that the company has earned its market cap in last 6.5 years itslef on average 10 year profit of 13843 crores. So if the stock is held for around 7 years, it is likely to earn it 90000 crore market cap again plus the future value will still be there in the stock price.
# Its probably ESG theme which is keeping global investors away from this stock. But Coal being an essential commodity in 70% of Indian power generation, it is unlikley to be replaced any soon.
# With Banks FDs generating just 6% return, the earning yield on Coal India is a very attractive proposition.