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Coal India share price up 10% in 5 days; a stock to bet on as India’s power demand gets back on track?

A heatwave spreading across north India and the steady resumption of economic activity has caused a sharp spike in the country’s energy consumption, with this Coal India’s share price has also surged 10% in the last five days. According to Morgan Stanley research, the daily energy consumption in India is now closer to 2019 levels. Resumption of economic activity and revival in energy consumption is being dearly eyed by Coal India’s management, as highlighted in a conference call the firm recently held. As the benchmark indices traded in the red on Friday, Coal India shares jumped 3% to trade at Rs 138 per share.

Coal India has trimmed production with the build-up in inventory stocks across mines and power plants. However, the company said it is committed to resume production once demand picks up. Dispatches for coal have increased over the past one week, as power demand recovers and factories restart operations. Offtake is now being recorded at 1.35mnte per day from 1.1mnte per day, recorded last month. The firm’s production target was set at 710mnte for the current fiscal year which is being re-evaluated.

The future could also be bright for Coal India as the company aims to substitute 100mnte thermal coal imported by Indian, which can help improve off-take. 18mnte of coal has been auctioned till date for imported coal substitution, and another 20-25mnte is lined up. This will also help the company become more competitive. Brokerage and research firm Edelweiss Securities said that the Rs 20/share dividend payout from Coal India looks highly unlikely as the firm stares at a huge cash outgo under the ‘Vivaad se Vishwas scheme. Edelweiss expecs a dividend of Rs 12 per share.

“Large proportion of COAL’s costs is fixed in nature with employee costs accounting for ~50% of the company’s expenses. Further, with the company focusing on OBR removal activities, COAL would continue using contractual employees, in our view,” said Brokerage firm Motilal Oswal in a report. Motilal Oswal has a buy rating on the stock with a target price of Rs 195. A fall in international coal prices could pose a major risk for the company, according to ICICI Securities while cutting its target price to Rs 264 per share from the earlier Rs 284. The brokerage has trimmed profit estimates for the fisal by 16%.

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Financials, bank stocks lead Nifty Bank gaining 3%; check what’s contributing to Sensex’s up move today

Extending gains from the previous session, BSE Sensex and Nifty 50 were trading nearly one per cent higher on Thursday mirroring the gains in Asian markets ahead of the expiry of futures and options contracts of May series. Sensex touched day’s high of 31,986, while the broader Nifty 50 index surpassed the 9,400-mark. Private bank stocks were the leading the rally today with index heavyweights such HDFC Bank, ICICI Bank, Kotak Mahindra and Axis Bank among the top index contributors. Among the top gainers were IndusInd Bank, Axis Bank, HDFC Bank. Larsen & Toubro (LT) and Kotak Mahindra Bank. The losers were led Infosys, ITC, TCS, HCL Tech and Tech Mahindra. The broader market, mid-caps and small-caps, were also trading higher, as their sectoral indices on BSE gained 0.94 per cent and 1.20 per cent, respectively.

“The markets opened above the crucial 9350 level and we need to hope it stays above those levels for a couple of trading sessions. If we are successful in doing that, the Nifty50 should attempt 9700 levels in the June series itself. The support range of the market has now been upgraded to 9000 – 9050 levels,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.

Nifty Bank index top sectoral gainer: Nifty Bank index surged nearly 3 per cent in trade led by gains in IndusInd Bank, Axis Bank, Bandhan Bank and RBL Bank. On the contrary, Nifty IT index was down over one per cent weighed down by Wipro, Infosys, HCL Tech and TCS.

Corporate earnings: Federal Bank, CEAT, Heidelbergcement India, Lupin, TVS Motors, IIFL Finance, Muthoot Capital Services, Radico Khaitan, Rain Industries, Tata Steel Long Products and Wendt (India) are among 24 companies are scheduled to announce their March quarter earnings.

Uflex shares jump 17%: Uflex share price surged 16.76 per cent to Rs 202.65 apiece on BSE in Thursday’s after the company in a press release said that it has developed a Personal Protective Equipment (PPE) Coverall ‘Flex Protect’ in joint collaboration with lIT-Delhi and INMAS, DRDO, Delhi.

Global markets: In overnight trade on Wall Street, US stock market indices rose as the further easing of lockdowns lifted optimism for an economic recovery. The Dow Jones rose 2.2 per cent, the S&P 500 gained 1.48 per cent, and the Nasdaq Composite added 0.77 per cent.

FII and DII data: Foreign institutional investors (FIIs) sold shares worth Rs 334.74 crore, while domestic institutional investors (DIIs) bought shares worth Rs 2,408.85 crore on a net basis on Wednesday, according to the provisional data available on the NSE.

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Birla Corporation share price rockets 40% in two days, cement shares gain as demand picks up

Cement stocks rallied nearly 20 per cent in Wednesday’s trade as most of the countries eased coronavirus-led lockdown restrictions which is likely to provide a fillip to the construction activity. Birla Corporation share price soared 19.12 per cent to hit day’s high of Rs 580 apiece. The stock has gained nearly 40 per cent in two trading sessions. In less than 15 trading days, Birla Corporation share price has increased to Rs 580 from Rs 372.50. However, the stock hit its 52-week high of Rs 807.60 in February this year, since then Birla Corporation shares have climbed off over 28 per cent. Many brokerages have turned bullish on the stock with a ‘buy’ rating to it and upside of 20 per cent. “While revenues during the first lockdown were almost nil, manufacturing activities were allowed to resume production in a phased manner from April 20,” ICICI Direct Research said in a report.

Among other cement and cement products stocks, Dalmia Bharat shares surged 8 per cent, Anjani Portland Cement shares advanced 11.42 per cent, Shri Keshav Cements and Infra, and Keerthi Industries shares hit 5 per cent upper circuit each. While JK Lakshmi Cement shares were up 4 per cent. In comparison, S&P BSE Sensex was trading 1.09 per cent higher at 30,943. Last week, Birla Corporation reported a 52 per cent rise in consolidated net profit at Rs 194.73 crore in the quarter ended March 31. The cement company had clocked a profit of Rs 128.19 crore in the corresponding quarter of the preceding fiscal. “While FY21 would be adversely impacted due to COVID-19, the outlook for FY22E remains positive as upcoming capacities should drive market share gains,” Motilal Oswal said in its research report, maintaining a ‘buy’ rating to the stock with an upside of 20 per cent.

ICICI Direct Research is also bullish on the stock and has revised its target price with an upside of 5 per cent. “While the ongoing expansion may increase the debt burden in the medium term, the company’s healthy asset utilisations, healthy margin profile remain key positives, which will help the company to ride this medium-term challenges,” ICICI Direct Research said in its recent report. We upgrade the stock to BUY with a revised target price of Rs 610.

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JSPL, JSW Steel share prices rally up to 12%; metal stocks gain as more countries ease lockdown

Jindal Steel and Power (JSPL) share price rallied over 12 per cent to Rs 108.70 apiece on BSE in Tuesday’s volatile session after the company reported a consolidated net profit of Rs 305.62 crore in the quarter ended March 31. The company had posted a net loss of Rs 2,713.34 crore in the corresponding quarter of last year. The stock hit the day’s low of Rs 99.20 per share. Jindal Steel and Power share price has risen 75 per cent from its low of Rs 62.10 touched in April. While the stock is still 46 per cent down from its 52-week high of Rs 202.40 hit in the second month of the calendar year 2020. S&P BSE Metal index was ruling with upticks with all the constituents in green except Vedanta, as more economies are easing lockdown restrictions.

At 2.15 PM, Jindal Steel and Power was leading the pack of gainers with a growth of 11.51 per cent to Rs 107.50, followed by JSW Steel and NMDC, up 5.83 per cent and 3.52 per cent, respectively. Hindalco Industries share price was up 3.52 per cent, SAIL gained 2.20 per cent, Tata Steel advanced 2 per cent. While Coal India and National Aluminium were up 1.92 per cent and 1.67 per cent. On the flip side, Vedanta share price was down 0.73 per cent to Rs 88.45, the only stock trading in red in BSE metal index. In comparison, the S&P BSE Sensex was trading 0.49 per cent down at 30,521.

The total income of Jindal Steel and Power during the fourth quarter of FY20 was down at Rs 8,835.23 crore as against Rs 10,158.95 crore in the same period a year ago. Total expenses, however, stood at Rs 8,355.48 crore during the quarter under review as compared to Rs 11,850.61 crore in the corresponding period of last year.

Research and brokerage firm Motilal Oswal in results flash, recommended the stock with ‘buy’ rating to it. From yesterday’s close of Rs 96.40, the stock will have to jump 38% to touch the target price of Rs 150 predicted by the brokerage firm. “JSPL’s 4QFY20 consolidated EBITDA of Rs 2,220 crore was up 22% QoQ due to higher steel prices in Indian and Oman operations,” Motilal Oswal said in a research report. “The beat on estimates was led primarily by higher-than-expected margins in Oman operations and lower raw material costs in standalone operations due to usage of Sarda mines’ inventory,” it added.

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