Coal India eclipsed ONGC on Tuesday to become the most valued state owned firm and the fourth largest listed firm on the BSE. Shares rose to an all-time high of R421.05 commanding a market cap of R2.66 lakh crore, highest since its listing in November 2010.
The stock has outperformed the broader market this year and has risen 20% in the last three months. Improved volume growth, expectations of likely auction of coal linkages have supported a strong rally in the stock with several analysts increasing their estimates for coal producer’s earnings for FY16-FY17. Recently Morgan Stanley increased price target to R530 from R449, indicating a 36% total return potential over one year. The brokerage expects 31% CAGR in the ebitda over FY2015-18, showing conviction in its volume growth and pricing power, said the brokerage note.
