After several months of tepid volume growth and rising renewable capacities, investors had shied away from Coal India Ltd. Its stock dropped to all-time lows in October. But a recovery in sales and low valuations is lifting sentiments. November’s production and sales volumes were up 3.3% and 8% year-on-year (y-o-y). The stock gained 2.6% on Wednesday. However, it’s still about 39% away from its pre-covid highs.
While the lockdown impacted the company’s volumes significantly during the June quarter, a recovery in the September quarter with a 10% sales growth comes at a good time. Cumulative production is up 3% y-o-y and sales are down by just 1.8%.
Demand is up for thermal power generation lately. Power generation had slipped in April-August, but has recovered sharply since.
