Jefferies observes that Coal India's recent volume growth trend has strengthened, making it well-positioned to meet India's increasing power requirements.
In a recent note, Jefferies highlighted the recent decline in Coal India shares as a promising opportunity for investors to consider investing in the state-run mining company. The international brokerage reiterated its 'buy' recommendation on Coal India, setting a target price of Rs 530 per share. Based on the closing price of Rs 416.9 on the BSE, this suggests a potential upside of 27 percent. With a 13 percent decrease from its peak, Coal India shares have become appealing to the broker. Jefferies pointed out that the coal miner's stock is currently trading at a significant 57 percent discount compared to the Nifty 50 PE. Historically, from 2011 to 2018, Coal India typically traded at an average discount of around 16 percent. Furthermore, Coal India's recent volume growth trend has shown improvement, positioning it well to meet the increasing power demand in India. Additionally, the decline in e-auction prices appears to be mostly resolved.
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