Shares of Coal India Ltd (CIL) gained 3 per cent on Friday as its subsidiary Northern Coalfields Ltd (NCL) will levy ‘Singrauli Punarasthapan Charge’.
As per Coal India’s stock exchange disclosure, the board approved a standard levy of ₹300 per tonne across all mines under its subsidiary, which will be implemented from May 1, 2025.
The move is projected to generate additional revenue of ₹3,877.50 crore.
Analysts see a potential upside due to the development, predicting Coal India’s EBITDA to rise 8-10 per cent in FY26-27.
Global brokerage Morgan Stanley has assigned an overweight call on the stock at a target price of ₹525 apiece, a 44 per cent upside from previous close of ₹363.85. The brokerage emphasised that the levy is a positive development, a 2.5 per cent of FY26 estimated revenue. It implies 8 per cent upside risk to FY26 earnings estimates.
JP Morgan estimated EBIDTA to rise 8-10 per cent in FY26-27. It has maintained a neutral call at an increased target price of ₹420 per share from ₹395.
Nuvama Institutional Equities has turned positive on Coal India on any signs of a sustained volume recovery. However, it has also cited concern on lack of volume growth.
The cash inflow from the levy is likely to be widely used to fund the upcoming land acquisition and rehabilitation programme at one of the mining areas in Singrauli over the next few years.
Nuvama expects a ₹34 increase in the fair value, assuming a 5X rise in the enterprise value-to EBITDA multiple. Nuvama estimated a capex ₹17,000 crore each in FY26 & FY27. The brokerage assigned target price of ₹419, retaining hold call.
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Shares of Coal India led the gainers of Nifty 50 constituents on Friday, rising by 2.34 per cent to ₹372.35 as at 10.37 am, after hitting an intraday high of ₹375.75.
