Coal India Limited (CIL) is set to make its investors very happy in the upcoming financial year 2024.
The company is poised to grant its shareholders the largest dividend in its history, offering an impressive dividend per share (DPS) payout of Rs 30.
Prior estimates by Nuvama had projected a DPS of over Rs 20, potentially yielding an annual dividend rate of about 21 percent.
Coal India’s Triple Benefits Predicted by Nuvama
The substantial dividend payout is expected to be distributed during the latter half of the financial year 2024.
to Nuvama, a domestic brokerage firm, Coal India is poised for significant gains, particularly in the lead-up to the pre-election year.
Nuvama suggests that Coal India stands to benefit greatly from three key factors: volume growth, improved e-auction prices, and potentially its highest dividend payment ever.
Positive Outlook for Coal India
Nuvama also anticipates that as the monsoon season concludes and hydro-wind power generation decreases, there will be an upswing in demand for thermal power.
This shift is expected to positively impact Coal India Limited during the latter half of FY 2024.
Furthermore, Nuvama projects that the DPS estimate for FY 2025 could reach Rs 25 per share, while the dividend yield for FY 2023 currently stands at 8.4 percent.
Significant Rise in E-Auction Premium
In light of the global surge in coal prices, it is anticipated that the e-auction premium could remain as high as 106 percent in September, compared to 54 percent in June.
Global coal prices have surged due to increased industrial activity worldwide, and Coal India is not immune to this trend.
Nuvama has also revised its EBITDA estimate for Coal India, increasing it from 8 percent to 9 percent, attributing this adjustment to expected increases in e-auction prices and volumes.
