Coal India - Mahurat Picks 2012 - ICICIdirect

(Buying Range: Rs.348-Rs.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.

Source : Equity Bulls

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