Coal India Shares Rally 3% as Unit Northern Coalfields Announces Additional Levy
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The stock market witnessed a surge in Coal India shares, with the scrip rising by 3% to hit ₹375.75 on the Bombay Stock Exchange (BSE) after its subsidiary, Northern Coalfields Ltd (NCL), announced an additional levy on coal dispatches. This move is aimed at boosting revenue and supporting mine rehabilitation efforts.
**What’s Behind the Rally?================================================퍼Js Leonard Rimpley states, "This additional levy is a positive move for Coal India, as it will help the company to generate additional revenue and support its mine rehabilitation efforts."================================================外 key: additional levy
**Sanjiv Bhasin, Executive Vice President of the Association of International Wealth Management (AIWM), shared his views on the issue, stating, "The announcement is a welcome positive for the coal sector, which has been facing challenges in recent times."================================================外 key: challenges, sector
**Brokerages React================================================
Brokerage firm JP Morgan maintained a "neutral" rating on Coal India but increased its target price to ₹420 from ₹395, citing the recently announced fuel supply agreement (FSA) price hike as a key positive. The revised target implies a potential upside of around 11.7% from the stock’s current levels.
Coal India: A Maharatna Company
Coal India, a state-owned Maharatna company, is the largest coal producer in India. Its subsidiary, NCL, contributes significantly to its overall output. The company operates in Madhya Pradesh’s Singrauli and Uttar Pradesh’s Sonbhadra districts.
Additional Levy: A Boost for Coal India’s Bottom Line?
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The additional levy, which will apply uniformly to all NCL mines, is expected to generate around ₹3,877.50 crore in additional revenue. While this move is seen as a positive step, market participants will be closely monitoring how it impacts Coal India’s pricing strategy and demand trends, particularly from power sector consumers, which account for nearly 88% of NCL’s coal dispatches.
What’s Next?
Coal India shares have fallen 15.45% over the past year and are down 29.77% in the last six months. However, the stock has gained 1.43% in the past week. According to Trendlyne data, the consensus average target price for Coal India shares stands at ₹482, implying a potential upside of 28% from current levels. Out of the 26 analysts covering the stock, 20 have a "buy" rating, four recommend "hold," and two suggest "sell."
Conclusion
In conclusion, the announcement of an additional levy by NCL has sent Coal India shares rallying 3% to ₹375.75. This move is seen as a positive step, as it will help boost revenue and support mine rehabilitation efforts. With brokerages and analysts maintaining positive ratings, investors may want to consider capitalizing on the potential upside in Coal India shares.
Sources:
- "Coal India: NCL to impose additional levy on coal dispatches" (Business Standard)
- "Coal India shares rally 3% as unit Northern Coalfields announces additional levy" (Economic Times)
- "Coal India: A Maharatna company" (Coal India’s official website)
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(research: Information from various news sources including articles by
Neha Yadav, Sobia M. A. Malik, and Barsha R. Joshi)
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