Citi has maintained a ‘Neutral’ rating on Coal India, even as it raised its target price to ₹395 from ₹390, following the company’s Q4 performance that beat expectations modestly on adjusted EBITDA. However, the brokerage remains cautious due to flattish realisations, subdued volume trends, and limited near-term upside catalysts.
According to Citi, Q4FY25 EBITDA—excluding the overburden removal (OBR) adjustment reversal—was 6% ahead of estimates, signalling strong cost control and operational efficiency. However, blended realisations and volumes remained flat year-on-year, which dampened the revenue momentum.
A key factor for Coal India’s bottom line has been its eAuction realisations, which were down 2% sequentially, though up 2% YoY. Citi noted that coal inventory levels across India remain elevated, limiting pricing power and upside from auction premiums.
The brokerage added that while valuations remain reasonable, with the stock trading near its 5-year consensus average, it sees limited upside visibility due to the lack of volume triggers or significant pricing flexibility. A structural improvement in demand or policy-driven pricing revision would be necessary for a re-rating.
Disclaimer: The above views are those of the brokerage and not the publication. Investors should consult a certified financial advisor before making investment decisions.
