Maharatna Company Coal India to Pay Rs 15 Apiece Dividend Soon; Should you Invest?

Coal India Dividend Payout Soon: Coal India Ltd had recently announced that board has approved an interim dividend of Rs 15 per share. The company informed, the Board of Directors at its meeting held on date has inter alia, declared 1st Interim Dividend for the financial year 2022-23 @ Rs. 15.00/- per share of the face value of Rs 10/- as recommended by the Audit Committee of CIL at its meeting held on date.

The company has said in a stock exchange filing that “The Board of Directors at its meeting held on date has inter alia, declared 1st Interim Dividend for the financial year 2022-23 @ Rs. 15.00/- per share of the face value of Rs 10/- as recommended by the Audit Committee of CIL at its meeting held on date. As already intimated to stock Exchanges vide letter no CIL:XI(D):4157/4156:2022 dated 26.10.2022, the company has fixed Wednesday, 16th Nov’ 2022 as the “Record Date” for the purpose of declaration of 1st Interim Dividend on equity shares for the Financial year 2022-23. The date of payment/despatch of “1st Interim Dividend” shall be by 6th Dec’ 2022.”

As per the data available on BSE, the ex-dividend is falling on 15 November 2022. For the fiscal year that concluded in March 2022, or FY22, Coal India announced a 170.00 per cent equity dividend, or Rs. 17 per share. This yields a dividend of 6.70 per cent at the current share price of Rs 253.40.

Financials

Coal India reported a 106 per cent year-on-year (YoY) gain in its Q2 profit at Rs 6,044 crore. In the same quarter a year ago, the PAT was at Rs 2,933 crore.

The company’s consolidated revenue jumped 28.1 per cent YoY to Rs 29,838 crore during the quarter and its consolidated EBITDA stood at Rs 7,280 crore.

In the September ended quarter, the company reported production of raw coal at 139.228 million tonnes as compared to 125.839 million tonnes in the year-ago period. The offtake also improved to 154.533 million tonnes in Q2FY23 from 147.434 million tonnes in Q2 FY22.

In the previous financial year (FY), the company declared a dividend of Rs 17 per share, resulting in a dividend yield of over 6 per cent as per the current stock price.

What Should Investors Do?

The research analysts of the broking firm ICICI Securities said “We maintain our BUY rating with DCF-based target price of Rs 294 on CIL, which is currently trading at 6.6x P/E and 3.1x EV/EBITDA on FY24E basis with 35.2 per cent RoE. It has announced high 1st interim dividend of Rs15/sh (we expect two more payouts in FY23). We believe dividend yield will be 9-10 per cent at CMP.”

The research analysts of the broking firm Motilal Oswal said “Consequently, we again raise our FY23 EBITDA/PAT estimate by 22 per cent/27 per cent after a 23 per cent bump up in 1Q. We also raise our FY24 EBITDA/PAT estimates by 6 per cent/3 per cent, respectively, and our TP to INR 325 (up from 265), valuing the stock at 4x FY23 EV/EBTIDA. We reiterate our Buy rating on the stock and COAL continues to be our top pick in the metals sector. The stock trades at an inexpensive valuation of 3x/4.8x our FY23/24 EV/EBTIDA. On P/B, the stock trades at 2.6x/2.2x on FY23/24 estimates. The company has declared an interim dividend of INR 15 and we estimate DPS of INR 26.7 for FY23.”

The shares of Coal India closed on Friday at Rs 253.40 apiece, down by 0.08% from the previous close of Rs 253.60. The stock had touched a 52-week-high of Rs 263.40 on (09-November-2022) and a 52-week-low of Rs 139.15 on (20-December-2021). The target price set by the above brokerage companies would be a new 1-year high for the stock if achieved.

Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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