Reviews

Published: Aug 20, 2023
Updated: Aug 20, 2023

Coal India Faces Setback: Shares Decline 2% After Ex-Dividend Trade

Coal India, a prominent public sector undertaking, witnessed a 2% drop in its shares on Friday due to trading ex-dividend. The company also reported a 10% decline in Q1 net profit to ₹7,941 crore. This setback comes amid broader concerns in global markets and specific challenges in the Indian IT sector.

Ex-Dividend Impact:

As the stock traded ex-dividend on August 18, Coal India's shares experienced a 2.17% dip, reaching 227.25 on the NSE at 1.28 pm. The company had previously declared a final dividend of ₹4 per equity share during the Q4 and annual earnings announcement in May 2023. August 18 was established as the fixed record date for determining members' eligibility for the final dividend payment.

Market Performance and Capitalization:

Opening at ₹229.15 on the BSE, Coal India's market capitalization currently stands at ₹143,160.18 crore. The stock's performance over the past year showcases a 52-week high of ₹263.30 on November 9, 2022, and a low of ₹207.70 on March 27, 2023.

Broader Market Trends:

Indian shares faced a downward trend due to a combination of factors, including IT sector pressures and international concerns. The Nifty 50 index experienced a 0.52% decline at 19,265.50, while the S&P BSE Sensex fell by 0.49% to 64,839.50 as of 10:04 a.m. IST. Both benchmarks have sustained losses exceeding 0.5% during the week.

Q1 Performance Overview:

Coal India's Q1 results reveal a 10% YoY reduction in net profit, amounting to ₹7,941 crore in the quarter ending June 2023. This decrease is in contrast to the ₹8,834 crore reported during the corresponding period last year. While net sales slightly increased to ₹33,072.6 crore during the reviewed quarter from ₹32,497.9 crore in Q1FY23, the dip in net profit drew attention.

Capital Expenditure Growth:

The company's capital expenditure (capex) demonstrated an 8.5% growth during the initial four months (April-July) of fiscal 2023-24, reaching ₹4,700 crore. Coal India emphasized that capex utilization nearly reached 100% of the progressive target of ₹4,754 crore for the period and 28.3% of the annual target of ₹16,600 crore for FY24.

Coal India's recent challenges, exemplified by share declines and decreased net profit, reflect broader market concerns and sector-specific issues. The company's strategic focus on capital expenditure growth is evident, but its overall performance continues to be influenced by various economic factors and industry dynamics.