Coal India Ltd is likely to see more demand shocks this fiscal year as demand for electricity is expected to remain muted following the lockdown. The stock has underperformed the broader market in the past one year, tumbling 41% against the 22% fall in the Nifty 50 index.
Due to the lockdown, several major factories that consume power have been shut down. This has resulted in lower offtake of coal for thermal power. In fact, March is considered a seasonally better month, but coal offtake fell sharply 10.3% year-on-year to 53.5 million tonnes.
Further, this has also impacted offtake for the year. In fact, after many years, this is the first time Coal India has seen slippages in its offtake. In FY20, its offtake shrank 4.3% year-on-year.
