Jefferies raises Coal India target price, says valuation reasonable The brokerage firm Jefferies has increased its target price for Coal India, citing a reasonable valuation and improved earnings outlook. The firm raised its FY26–28 earnings estimates by 1–4%, driven by higher e-auction premiums and a modest recovery in dispatch volumes. Jefferies noted that Coal India’s earnings trajectory is expected to improve, with a projected 9% compound annual growth rate (CAGR) over the next three fiscal years, following a 21% decline in earnings per share (EPS) over FY24–26E. The analysis highlights a potential revival in profitability as power demand and realisations recover. Jefferies models dispatch volumes to grow at a 5% CAGR over FY26–28, with total dispatches rising from 735 million tonnes in FY26E to 810 million tonnes in FY28E. The firm expects Coal India to benefit from a rebound in electricity consumption, supported by forecasts of intense summer conditions and a higher probability of weak monsoons. It noted that subdued power demand had previously constrained dispatches, with volumes rising just 1% year-on-year in FY25 and declining 3% in 11MFY26. However, Jefferies believes this trend should reverse as structural demand for power strengthens. On pricing, the firm highlighted higher international coal prices as a near-term positive for domestic e-auction realisations. Global thermal coal benchmarks have risen about 16% over the past week, and Jefferies is incorporating an e-auction premium of 63–69% over linkage coal for 4QFY26–FY28, compared to a long-term average of 76%. The report noted that e-auction volumes account for approximately 10% of Coal India’s total dispatches.#jefferies #coal_india #nntp #e_auction #fy26
