COALINDIA - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.4
| Stock Code | COALINDIA | Market Cap | 2,67,365 Cr. | Current Price | 435 ₹ | High / Low | 462 ₹ |
| Stock P/E | 12.6 | Book Value | 32.4 ₹ | Dividend Yield | 6.09 % | ROCE | 96.6 % |
| ROE | 96.1 % | Face Value | 10.0 ₹ | DMA 50 | 412 ₹ | DMA 200 | 399 ₹ |
| Chg in FII Hold | 0.26 % | Chg in DII Hold | -0.27 % | PAT Qtr | 8,342 Cr. | PAT Prev Qtr | 116 Cr. |
| RSI | 56.5 | MACD | 6.98 | Volume | 1,29,26,242 | Avg Vol 1Wk | 1,24,81,691 |
| Low price | 349 ₹ | High price | 462 ₹ | PEG Ratio | 0.84 | Debt to equity | 0.03 |
| 52w Index | 76.1 % | Qtr Profit Var | 102 % | EPS | 34.5 ₹ | Industry PE | 18.8 |
📊 Analysis: COALINDIA trades at a P/E of 12.6, below the industry average of 18.8, indicating undervaluation. Exceptional ROE (96.1%) and ROCE (96.6%) highlight outstanding efficiency. EPS of 34.5 ₹ supports profitability, while PEG ratio of 0.84 suggests attractive valuation relative to growth. Dividend yield of 6.09% is very strong, offering consistent income. Debt-to-equity at 0.03 reflects a near debt-free balance sheet. Technicals show price above DMA 50 (412 ₹) and DMA 200 (399 ₹), with RSI at 56.5 and MACD (6.98) signaling bullish momentum. Quarterly PAT surged (8,342 Cr. vs 116 Cr.), showing robust earnings momentum. Institutional activity is mixed, with FII holdings up (+0.26%) and DII holdings down (-0.27%).
💰 Ideal Entry Zone: Between 410 ₹ – 425 ₹ (near DMA 50 support and valuation comfort). Current price (435 ₹) is slightly above ideal entry, so staggered accumulation is recommended.
📈 Exit / Holding Strategy: For long-term investors already holding, maintain positions given strong ROE, ROCE, and dividend yield. Exit only if price sustains below 399 ₹ (DMA 200) or if earnings momentum weakens significantly. Holding period: 3–5 years, with periodic review of profitability and sector demand cycles.
Positive
- Low P/E (12.6) compared to industry average (18.8)
- Exceptional ROE (96.1%) and ROCE (96.6%)
- EPS of 34.5 ₹ supports profitability
- Dividend yield of 6.09% provides strong income
- Debt-to-equity ratio of 0.03 indicates near debt-free status
- Quarterly PAT growth (+102%) shows strong earnings momentum
Limitation
- Price close to 52-week high (462 ₹), limiting upside in short term
- DII holdings reduced (-0.27%), showing domestic caution
- Sector cyclicality tied to energy demand and government policies
Company Negative News
- DII holdings reduced (-0.27%)
- Dependence on coal sector exposes company to environmental and regulatory risks
Company Positive News
- Quarterly PAT surged (8,342 Cr. vs 116 Cr.)
- FII holdings increased (+0.26%), reflecting foreign confidence
Industry
- Industry P/E at 18.8 shows COALINDIA trades at a discount
- Coal sector remains critical for energy supply, though facing long-term sustainability challenges
Conclusion
✅ COALINDIA is a fundamentally strong, undervalued company with exceptional efficiency metrics and high dividend yield. Ideal entry is near 410–425 ₹. Long-term holders should maintain positions for 3–5 years, monitoring profitability, sector demand, and regulatory developments.