Valuations seems attractive no doubt but i feel below 3 reasons is what is worrying investors in CIL 1. captive coal mines by coal india’s erstwhile customers seems a big concern, also. 2. Last year since Supreme court allowed that States can also have seperate Royalty charges, market maybe wary of royalty/cess increases. Plus 3. the good growth shown by renewal energy shows future growth on coal may be less than in the paat.
5 Likes
Future do belong to renewables but that future is at least 10 yrs in India for coal degrowth to happen (Because energy demand is growing at 5% but renewable energy is growing only at 10%. So coal still have a long way). By that time, CIL would have paid us back since P/E=7.
3 Likes
These source of energy is just like food habits. one eats whats easily available. US & Russia are rich in natural gas whereas india has negilible. Solar suits India due to climatic conditions but solar was not growing at a rapid pace untill last 3 yrs.
4 Likes
Even though Coal may remain a major energy source for India for the next decade or so, but it seems Coal India will continue to loose its market share. From the latest quarterly results - both FSA Volumes and E-Auction Volumes dropped; E-Auctions prices also dropped.
- Volume drop shows competitive intensity increasing; NTPC and other customers using their captive mines for their coal requirements.
CIL may continue to give good dividend yield and unless it is able to grow in other areas (other critical minerals - rare earths, etc) using its mining expertise, i fear it will just act like a bond, and stock value maybe stuck in a range till then..
1 Like
CIL’s Coal Offtake is reducing at an accelerated rate.
-5.9% for Oct 2025 as compared to Oct 2024
-2.4% for Apr-Oct period as compared to Apr-Oct 2024
Disclosure: Invested
2 Likes