Coal India's stellar run continues; one-year returns stand at 71%

Coal India share price, share market news: The company has earmarked around Rs 16,500 crore in capex in FY24E, which will help the company develop infrastructure across numerous verticals.

The stock’s one-year return stands at a staggering 71 per cent.

Coal India share price, share market news: Shares of government-owned Coal India (CIL) notched a fresh eight-year high on Monday, January 1, as the stock continued its gaining spree. The shares hit a new 52-week high for the third straight session today.

At 10:51 am, the stock traded 2.39 per cent higher at Rs 384.95. Earlier, it hit a new 52-week high of Rs 386.75, gaining as much as 2.87 per cent.

Similar to other PSU stocks, which have gained immense traction in the year gone by, Coal India has also been gaining strength. The stock’s one-year return stands at a staggering 71 per cent.

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In its December 28 report, brokerage firm Motilal Oswal Financial Services (MOFSL) has given a buy rating on the stock with a target price of Rs 430 per share. The brokerage has highlighted that the company has intensified its focus on capex, which will improve its evacuation infrastructure. Capex, which used to hover around Rs 65–Rs 85 billion until FY20, tripled in FY23 to Rs 186 billion. Over the last three years, capex has exceeded budget estimates.

The company has earmarked around Rs 16,500 crore in capex in FY24E, which will help the company develop infrastructure across numerous verticals such as railway corridors, land acquisitions, HEMM procurement, setting up CHPs, etc.

The company has already incurred a capex of nearly Rs 105 billion during April-Nov’23 (up 7.6% YoY); its FY24 yearly capex is expected to surpass the budgeted target.

From a technical point of view, too, the Rs 425 level has been set as the target for the coal producer. Avdhut Bagkar, Derivatives & Technical Analyst, StoxBox, noted that the stock scaled an 8-year high on Monday, signalling a robust underlying trend.

The price action is inevitably witnessing resilient momentum in the overbought category of the Relative Strength Index (RSI). Unless the support of Rs 360 is breached, the trend is to aim at hitting Rs 425 levels. The following support exists at Rs 340.

The “Higher High, Higher Low” formation continues to explore uncharted territories in the absence of noteworthy selling pressure, the expert noted.

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