CIL loses edge on e-auction prices

livemint.com:

₹13,000 crore for the remainder of FY2024 that would act as a further drag on earnings in subsequent quarters," said a report by Kotak Institutional Equities dated 8 August. To be sure, the CIL stock is looking at a muted 2023 after having a stellar run in 2022. Recall that the share prices had risen as much as 54% last year.

So far in 2023, CIL’s shares have gained a much lower 4.3%. The stock has also been bogged down post the offer for sale in May. As such, meaningful upsides may be capped.

At the same time, returns could look better thanks to the attractive dividend yield. In FY23, CIL’s cash from operations was ₹35,700 crore. This peak cash generation could be hit as e-auction premium declines.

“Even then, CIL could sustain ₹25,000 crore in cash generation as against the capex needs of ₹16,500 crore in FY24E. Thereby, the residual cash of ₹9,000 crore could be doled out as dividends-translating into ₹15 per share," said analysts at Antique Stock Broking in a report on 9 August. In FY23, the dividend per share stood at ₹24.25.