Coal India - Volumes drive FY2013, price increase to begin FY2014E - Kotak

Coal India has announced a price increase (4-5%) effective from June 2013, implying that revenue growth in FY2014E would be more balanced (3% volumes, 4% prices) unlike FY2013 that was dominated by volume growth (8% yoy). Financial performance and reasonable valuations (5X EV/EBITDA) notwithstanding, unresolved business issues around incremental coal supplies and an impending stake sale have so far kept stock performance under check that may be catalyzed by the revision in coal prices.

Maintain BUY with PT of Rs410/share.

Source : Equity Bulls

Keywords