COALINDIA - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.6

⛏️ Fundamental Analysis: Coal India Ltd. (COALINDIA)

Coal India is a classic value stock with exceptional profitability, strong cash flows, and a generous dividend yield. It’s a solid candidate for long-term income-focused investors and those seeking defensive exposure.

Metric Value Implication

Market Cap ₹2,36,433 Cr Large-cap; dominant PSU with stable earnings

Stock P/E 6.70 Deeply undervalued vs. industry PE of 11.1

PEG Ratio 0.25 Excellent; strong earnings growth at low valuation

ROE / ROCE 38.8% / 48.0% Outstanding capital efficiency

Dividend Yield 6.65% Very attractive for income investors

Debt-to-Equity 0.09 Very low; strong balance sheet

EPS ₹57.4 Robust earnings base

Qtr Profit Var +12.4% Steady growth; consistent performance

FII/DII Holding Change +0.42% / -0.69% FII accumulation; DII trimming possibly due to sector rotation

📉 Technical Analysis

Current Price: ₹384

DMA 50 / DMA 200: ₹389 / ₹401 → Trading below both; mild bearish trend

RSI: 45.4 → Neutral zone; no strong momentum

MACD: -2.03 → Slight bearish crossover

Volume: Above average; healthy liquidity

💰 Ideal Entry Price Zone

Given the strong fundamentals and current technical setup

Ideal Entry Zone: ₹365–₹385

This range offers value near support and aligns with long-term moving averages

Avoid chasing above ₹400 unless there's a breakout with volume and earnings upgrades

🌱 Long-Term Investment Outlook

Why it’s a strong candidate

Exceptional ROE and ROCE — rare for PSU stocks

PEG < 0.3 — undervalued relative to growth

High dividend yield — ideal for income portfolios

Near-zero debt — financial stability

FII interest rising — institutional confidence

Risks to monitor

Sectoral headwinds — coal demand may face long-term pressure from renewables

Government ownership — policy decisions can impact profitability

DII trimming — possibly reallocating to growth sectors

🏁 Exit Strategy / Holding Period

If you already hold COALINDIA

Holding Period: 3–5 years for income and value appreciation

Exit Strategy

Consider partial profit booking near ₹520–₹545 (recent high) if valuation stretches

Hold as long as ROE stays above 30% and dividend yield remains above 5%

Reassess if coal demand outlook deteriorates or regulatory risks rise

Would you like a dividend income projection or comparison with other PSU dividend stocks like NTPC or ONGC?

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