Markets are on a path of extreme volatility. However, the best stocks are also trading differently from the major indices.
It is in this context that CLSA, an international market analytics agency, and ICICI bank, the country's leading brokerage firm, have come forward to invest in India's leading public sector companies.
The stock is forecast to gain 32-47%. The report also indicates that the company is likely to announce a dividend next week.
Coal india (BSE: 533278, NSE: COAL INDIA)
Coal india Limited is the largest producer of coal in the world. The Maharatna-owned company, owned by the Central Government, was established in 1975 with its headquarters in Kolkata.
As of 2020, Coal india owns 352 mines. The company produces 83 per cent of the coal required for the country. Coal india is the only company operating in the coal industry in the country.
The company manufactures a wide range of types of coal, including coking coal, non-coking coal and milling. Coal India's customers are large thermal power plants, steel and cement manufacturing companies.
Finance
The recently announced performance was worse than the market generally expected. The outcome for the second quarter of the current financial year was Rs 2,933 crore, down 1 per cent from the same quarter last year.
Revenue rose to Rs 23,291 crore on a year-on-year basis. However, the company's financial base is strong and secure. Brokerage firms are also expected to perform well in the coming financial quarters, according to a report released by brokerage firms.
Return on bank Interest!
For the financial year 2021 ending march this year, Coal india paid a dividend of Rs 12.5 per share. In november 2020 and march 2021, the dividend was transferred in two tranches of Rs 7.5 and Rs 5 respectively.
The dividend yield is estimated at over 8% based on the market value of Coal india shares today. This is a good return compared to the current 5.5 per cent interest rate on deposits in banks.
Bumper dividend this time? The company has not yet declared a dividend for the current financial year. In addition, higher dividends are being sought from public sector undertakings to address the central government's fiscal deficit.
If so, there is a possibility of declaring a higher dividend this time around. According to current reports, the company's board of directors is meeting on november 29 to announce the company's interim dividend for the 2022 fiscal year.
CLSA, an international market analytics agency, has set a target price of 32 per cent for Coal India. Meanwhile, ICICI Securities and Coal india have set a target price of Rs 234 per share.
They predict a 47 per cent gain. Shares of Coal india are currently trading at Rs 157-158. The company had a 52-week high of Rs 203 on october 6.
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