Coal India share price rises 3% to scale 52 week highs on strong December volume numbers
Coal India with gains of more than 3% scaled 52-week highs in the intraday trades on Tuesday, on a day when benchmark indices were down 0.7%. The investor confidence on Coal India has been boosted by rising production. The December Volume numbers reported by Coal India held testimony and indicated towards strong volume momentum continuing Coal India’s production at 71.9 million tons during December 2023 was up 8.3% year-on-year.
The cumulative production during the first nine months (April-December period) at 531.9 has grown 11% year-on-year. Coal India reported sales for December of 66.6 million tons also grew 6.2% y-o-y over. 62.7 million during December 2022.
With this Coal India’s sales during first nine months of FY24 at 552 million tonnes are up 11%. Also Read- Lemon Tree Hotels share price jumps over 10%, hits all-time high; should you buy? A strong growth in volume numbers is helping improve Coal India’s earnings prospects, The coal demand in the country remains strong and is being led by rising power demand. Coal India having long term Fuel supply agreement with power producers has done well to boost production to meet power demand.
Coal India is targeting a production of 780mt in FY24 and 850 mt during FY25. Coal India has achieved almost 73% of its production FY24 target already. Analysts at Motilal Oswal Financial Services estimates for Coal India to clock in 751mt and 850mt production during FY24 and FY25 respectively.
The rising production is also positive for growth in more profitable e-auction volumes. Coal india sells about 10% of its volumes in the open markets through e-auctions. The e-auction premiums that had softened in first half of FY23 however have rebounded well .
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