Coal India plans to increase coal prices by 11%, Chairman Pramod Agrawal hints - These 2 stocks will be in focus
Indonesia and Australia are the biggest markets of coal, and these countries have also witnessed an increase of 30 per cent in just 3 months.
Big news for Coal India! The company is likely to hike price. Why Coal India is increasing coal prices? How much it is expected to increase? And how it will impact the company's balance sheet and which stocks? Research Analyst Ashish Chaturvedi shares it all.
In conversation with Zee Business Managing Editor Anil Singhvi, Chaturvedi mentioned that the price hike was much-awaited. For so many years, Coal India has not hiked the prices. The company announced the last price hike in 2018. The market is anticipating that a hike of 10-11 per cent is on the cards. On Wednesday (15th September), the company's Chairman Pramod Agrawal hinted about the price hike. For many years, the prices are same. And in the worldwide market, the rates of coal have been increasing continuously.
He added that in the past one year, the coal that India is importing from America has jumped 100-120 per cent. The coal price in China is all-time high. Indonesia and Australia are the biggest markets of coal, and these countries too have witnessed an increase of 30 per cent in just 3 months. The global markets are rallying high, and surprisingly the reason behind this is the Indian market, which was facing a shortage of coal due to high demand. Coal India is the biggest coal miner not only in India, but globally. Till date, around 80 per cent of electricity is being generated through thermal i.e coal in India.
"The theme of renewable energy is going on, and to reach in the significant market it will take time. Till that time, Coal India has a huge opportunity, business and market size. But surprisingly due to shortage of coal in the Indian market, the prices have increased in the global market. But as of now there are no sign of price hike in the Indian market by Coal India," Chaturvedi added.
So, now there is a speculation that price hike will happen, and gradually there will be more such hike announcement will be made by the company. This will directly benefit Coal India, dividend-liberal policy; and balance sheet is already very strong. After price hike, the operational performance will also improve, he added.
जल्द ही कोयले के दाम 11% तक दाम बढ़ाएगा Coal India
कंपनी क्यों बढ़ाने वाली है कीमतें?
किन कंपनियों पर करें फोकस?
— Zee Business (@ZeeBusiness) September 17, 2021
There are two more stocks, which will be in focus and will be benefited from this price hike. Lignite manufacturing companies, which was earlier highlighted by Managing Editor Anil Singhvi. Lignite is also known as brown coal because its heat content is lesser than the normal coal. And that is the reason it is considered as inferior coal. But if Coal India is increasing the price, then there will be an impact on these two stocks as well—NLC India and GMDC. There will be a movement in these two stocks, he said.
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Commenting on the Coal India and lignite manufacturing companies' stocks, Market Expert Siddharth Sedani mentioned that the way Coal India is planning to increase the prices, this will definitely benefit the company. Their quality of Coal is also improving. So, in both ways, you will get better price. Coal India has a strong portfolio company and dividend is also excellent, he said.
(Disclaimer: The views/suggestions/advices expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)
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