Coal India share price rises 2% after Q1 results; should you buy the stock?

livemint.com:

₹233.05 against the previous close of ₹230.25 and traded with a gain of 1.26 per cent at ₹233.15 on BSE around 9:20 am. Shares of Coal India have underperformed the equity benchmark Sensex in the last one year. The stock is up about 7 per cent while the Sensex has gained about 12 per cent in the last one year period.

The stock hit its 52-week high of ₹263.30 on November 9, 2022, on BSE. Coal India Q1 results: Coal India posted a 10 per cent year-on-year (YoY) decline in net profit which stood at ₹7,941 crore during the quarter ending June 2023 down from ₹8,834 crore reported during the corresponding quarter last year. The net sales of the company grew marginally to ₹33,072.6 crore during the quarter under review from ₹32,497.9 during Q1FY23.

Sequentially, Coal India's net profit jumped 43 per cent from ₹5,527.6 crore during the quarter ending March 2023. Read more: Coal India Q1 Results: Net profit plunges 10% to ₹7,941 crore, marginal rise in net sales Brokerage firms are positive about the prospects of Coal India for the medium to long term. While most of them have maintained their buy call on the stock, some of them have even upgraded the stock.

Brokerage firm Nuvama Wealth Management maintained a buy call on the stock with a target price of ₹361, implying a 57 per cent upside. The brokerage firm estimates Coal India to report a volume uptick of 7 per cent and 4 per cent YoY in FY24 and FY25, respectively, which shall aid operating leverage. Besides, e-auction prices have been stabilising at a 54–58 per cent premium over FSA (fuel supply agreements) prices in Jun-Jul’23.