Shares of Coal India Limited fell by as much as 3.5% on Monday, March 3, 2025, following the release of its February business performance report. The country's largest coal miner reported a 0.8% year-on-year decline in production, reaching 74.1 million tonnes (MT). So far this financial year, production has increased by just 1.5% to 695.3 MT, amounting to 83% of its annual target of 838 MT for FY25.
The firm now faces the challenge of achieving an output of 142 MT in March to meet its full-year guidance. This has raised concerns among investors who seek stability before they invest in stocks linked to energy production.
Offtake declines, raising further concerns
Coal India's offtake performance also showed signs of weakness, declining by 4.8% year-on-year in February to 62.1 MT. The total offtake for the financial year so far stands at 693.4 MT, reflecting a marginal 1.3% growth. Market analysts view this slowdown as a worrying sign, particularly given sluggish power demand.
An analyst has pointed out that lower offtake levels could impact the company's earnings projections for the fourth quarter and FY26 unless economic activity picks up significantly. Additionally, inventory buildup may exert further pressure on future offtake figures, adding to the uncertainty surrounding Coal India's near-term performance.
Analysts issue mixed ratings on the stock
Despite the recent decline, market sentiment around Coal India remains mixed. An analyst has noted that the drop in offtake is a "key negative" for the stock but maintained an "overweight" stance with a target price of ₹525, indicating a potential 46% upside.
Out of 24 analysts covering the stock, 18 have given a "buy" rating, four recommend a "hold," and two suggest a "sell." The overall outlook remains cautious, with investors closely monitoring production and demand trends before making any new decisions about investing in stocks within the coal sector.
Stock trades lower amid market reaction
As of 11:30 AM on March 3, 2025, Coal India shares were trading at ₹353.27. The stock has declined significantly from its recent peak of ₹543, reflecting investor concerns about the company's ability to meet its annual targets and sustain earnings growth.
With the financial year nearing its end, market participants are closely monitoring Coal India's March production and offtake figures to assess whether the company can recover lost ground or face further downside pressure.
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