Shares of Coal India Limited jumped nearly 2% after Morgan Stanley initiated coverage on the stock with an Overweight (OW) rating and a target price of ₹525.
Morgan Stanley’s bullish stance on Coal India is supported by several factors, with a strong power demand outlook being a major contributor. The brokerage firm anticipates sustained volume and earnings growth for the company over the next few years. This growth trajectory is expected to be bolstered by Coal India’s healthy operating cash flows, which provide substantial flexibility for the company to continue executing its medium-term strategies, including maintaining dividends and capex plans.
One of the standout factors in Morgan Stanley’s analysis is Coal India’s attractive valuations. The stock is currently trading at 2.1x FY26 Price-to-Book (P/B) and 6.8x FY26 Price-to-Earnings (P/E) ratios, which the brokerage considers to be undervalued. Given these metrics, Morgan Stanley sees Coal India as a strong investment candidate, especially in the context of the ongoing sectoral tailwinds within the energy and mining industry.
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