Rise in production, sales volumes boost Coal India’s revival hopes

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.