COAL INDIA LTD
A CURSORY
FUNDAMENTAL LOOK
Current Market Price:-241.30 on
24.8.2017.
All time high:-Rs.447.10 on 5.8.2015.
All time low:- Rs.233.70 on
11.8.2017.
It is a Public Sector Undertaking engaged in coal mining and
they calls it NAVRATNA but ironically not performing well operationally and off
course financially. The latest key parameters of the company are given
here-under.
Equity:-62,074=10(cr) / June Quarter
result: +321.80 / E.P.S---0.05
It has a huge equity base and its June qr E.P.S is a paltry
.05 paise, furthermore if other income is excluded from it there would be loss
in this quarter and some earlier quarter too. However based on this quarter performance the annualized EPS would
not be more than .30 paise normally and on highly optimistic note take it as Rs.2/
for the F.Y-2017-18. Therefore it is presently running at a P/E of 804.33 and 120.65
on forward earning, which is phenomenally high and would not be able to sustain
the price line until and unless financial performance drastically improves. It
looks weak fundamentally therefore fresh investment in the company is not suggested.
A TECHNICAL –VIEW
It is terribly bad technically and making lower top and
bottom on the chart and hit an all time low of 233.70 on 11.8.2017. Furthermore
it is way below its long term moving averages on daily and weekly chart which
is bad sign. However after hitting the new low of 233.70 it is showing sign of pull
back and came above some of its short term moving averages but it seems that this
pullback may not last long. However it has good support from its bottom at
240.70/240.30/238.20 and finally at 233.70 and it closed just above it
on24.8.2017, therefore as long as it holds 238.20&233.70 on the closing
basis the pullback may continue but moving up it will face resistance at
249.40/253.20/259.90/265.25/271/284.45/291.85/296.80/300 but this up move can
fizzle out abruptly also. The overall technical setup is extremely bad and once
the on-going short pullback is over, which can happen anytime it is expected to
register new low in coming days/weeks. Therefore fresh investment in this stock
should be avoided and those who are stuck with it are advised to take advantage
of this pullback to get out of the stock on the rise or get out for sure if it
moves and closes below 233.70.
Remark:-The long term
trend is down. It is showing some sign of short pullback now which may not
last, furthermore since it weak on both fundamental and technical parameter as
of now so long call or investment is completely ruled out. Those who are stuck
should look for an opportunity to get out of this stock on the rise or as
suggested above.
Disclaimer:-The view expressed
here are solely of the author and he is not at all responsible in any way for
the outcome of the trade you enter based on the above view.
Note:
Price stated here is of spot market.
Contact me for
strategic guidance to enter and exit the trade.
