Nuvama has analyzed the impact of Coal India’s subsidiary, Northern Coalfields, introducing the ‘Singrauli Punarasthapan Charge’ of ₹300 per tonne on its entire volume, effective from May 1, 2025. The brokerage notes that the cash inflow from this levy is likely to be widely used to fund the upcoming land acquisition and rehabilitation programme at one of the mining areas in Singrauli over the next few years.
Nuvama expects this levy to boost Coal India’s FY26/27 EBITDA by 9-10%. The estimated capex of ₹170 billion in each of FY26 and FY27 largely incorporates the upcoming capex requirements for the rehabilitation project in the Singrauli area. The brokerage also highlighted that assuming a 5x EV/EBITDA multiple, the fair value of Coal India’s stock can increase by ₹34 per share.
Yesterday’s stock price performance:
On February 27, Coal India’s share price closed at ₹362.90, up by ₹1.75 or 0.48%. The stock saw a positive movement, reflecting investor optimism following the announcement of the new levy and its expected impact on the company’s earnings and valuation.
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