As per various news it seems that, Coal production is going to move up during FY24 based on demand.
There is a possibility that, based on electricity demand up trend more Coal production will happen during FY24. Also it could be aided by EV demand.
Since I have been holding Coal India mainly as a Dividend stock, I may continue to hold it for some more time.
I invested in Coal India at 165 to 180 levels, hence have started booking profits in staggered manner, as current price of 340+ looks fairly valued. I have considered P/B of 3.3 as Fair P/B for Coal India, as per my own study. 10 Year Median P/B is 3.8.
From P/B of 2.0, it has moved to 3.2 now hence looks fairly valued. Some investors may use P/E or other matrices to decide valuation of Commodity business.
Since this is Commodity business, any reduction in demand or Coal price reduction can have negative impact on PAT, but as of now, such signs are not visible.
Disclosure : This is not a Buy/Hold/Sell recommendation. These are just my observations, and being invested my views could be biased. I have not mentioned any Coal production figures as those are easily available in News and on screener.in.
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