Parag Parikh Flexi Cap Fund holds 5.76% of Coal India.
This fund always surprises investors by their stock selections occasionally but has delivered over 20% + CAGR over long term. Their strategy of buying stocks trading below Nifty P/E has worked well in the past.
Probably, they are expecting better EPS growth in Coal India due to their expansion in non-coal areas over 5-6 years. We need to find their thought process for such high allocation to Coal India.
My view is that FY25 will not be a good year for Coal India, as realizations will continue to fall impacting EPS growth which will move downward. After that, we need to watch for their targets for FY26 and FY27 and see early signs of improvement in Realizations, Volumes and EPS growth, only then further direction will become clear.
This will be a Dividend Yield Low EPS growth stock till that time.
Disclosure: Reduced the position during 2023 and 2024 and Holding the balance position for high dividend yield to support Dividend Yield at portfolio level. I may be wrong in my analysis.