Coal India (Buying Range: |348-|335)
• Coal India (CIL), the largest coal producing company in the world,
also enjoys a monopoly status in the Indian domestic market. CIL
contributes ~80-85% of the country’s total coal output and on the
demand side meets ~65-70% of domestic consumption
requirements. Coal India produces ~90% of its coal through open
cast mining and witnesses low stripping ratio, which ensures that
reserves are easily extractable thereby helping it position itself
among the lowest cost coal producers in the world
• On the back of massive capacity addition anticipated in the power
sector over the next few years, majority of which is expected in
the thermal segment there exists an imminent demand of coal,
which augurs well for Coal India and the company is well placed
to cater to the rising demand
• CIL has a strong balance sheet with robust cash flow and a
healthy liquidity position, which augurs well for the company.
Going forward, CIL is well poised to deliver healthy performance
and is a priced asset to be held in one’s portfolio.
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