Coal India share price tanks 3% after Q4 net profit falls nearly 18%; Should you buy, sell or hold? Coal India share price tanked 3% to Rs 230.4 today after the company’s consolidated net profit fell 17.7% on-year to Rs 5527.62 crore in the March quarter on higher provisions made for wage revision of employees. Consolidated revenue for the quarter stood at Rs 35161.44 crore, up 17.3% on-year. The board recommended a final dividend of Rs 4 per share. Coal India shares have risen over 4% in the last one month and jumped 23% in the last one year. “Coal India posted poor results with profits coming down both on sequential and on-year basis by over 28% and 17% respectively. Any further fall in coal prices will drag the company’s margins further in the coming quarters,” said Diwakar Rana, Senior Research Analyst, Prudent Equity.Stock call: Should you buy, sell or hold Coal India stock?Motilal Oswal: Buy – Target Price: Rs 285 “We maintain our e-auction premium estimate for FY24 at 99%. We have reduced our adjusted EBITDA/APAT estimates for FY24 by 9.2%/9.9% to factor in higher employee cost provisions. We retain our BUY rating with a target price of Rs 285, valuing the stock at 5x FY24E EV/EBITDA. COAL remains our top pick in the metals and mining sector. At a CMP of Rs 237, the stock trades at an inexpensive valuation of 3.9x FY24E EV/EBITDA,” said analysts at Motilal Oswal. “We increase our coal price estimates under FSA by ~2% in FY24/FY25 given the improved product mix and higher sales to the non-power sector. Consequently, this leads to a 12% increase in EBITDA for FY24E/FY25E. We roll over our valuation to FY25E, valued at 4.5x FY25E EV/EBITDA and arrive at a revised target price of Rs 301 (earlier Rs 295). Maintain ‘BUY’,” said analysts at Nuvama.
2. Warren Buffett talked about his business partner Charlie Munger in his letter. He said they both think alike but what it takes Warren Buffett a page to explain, Charlie Munger sums up in a sentence. Charlie Munger’s version, moreover, is always more clearly reasoned.
The lesson for investors: “I will add to Charlie’s list a rule of my own: Find a very smart high-grade partner – preferably slightly older than you – and then listen very carefully to what he says,” Warren Buffett said.
3. Warren Buffett emphasised that his long-time business partner Charlie Munger and he are business pickers, not stock pickers. He further said that efficient markets exist only in textbooks.
“We own publicly-traded stocks based on our expectations about their long-term business performance, not because we view them as vehicles for adroit purchases and sales. That point is crucial: Charlie and I are not stock-pickers; we are business pickers,” Warren Buffett said.