India is growing very fast and to fuel this growth, it needs the help of fossil fuels to fuel its industry. When it comes to fossil fuels coal still contributes significantly to running many industries and generating electricity. India gets its 70% of its electricity from the coal based thermal plants. These thermal plants need coal constantly for their function. Coal India Ltd is one of the biggest suppliers of coal in India because there is largest producer of coal in India. Most of the developed countries have grown on the cost of fossil fuels like coal. Today, these nations lecture India on reducing the use of coal, but they do not want to do the same.
For next few years, we can see rise in the production and use of coal in India because of the increasing demand for energy in India. Coal is the cheapest option available with India for which we are not depended on others. So, the future of this stock looks attractive. In last one year, this stock has doubled, and we can see more 20% upside in near future in coal India. Coal India is good quality stock because it is backed by India government. The prices of the stock are in affordable category and technically it is moving upwards.
The risk factor of this stock is measured balanced. Most of the brokerage houses have buy call on the coal India for up to 20% upside. But there is a huge pressure on the coal India to maintain its profitability.
Present Price- 448.50
Action- Buy for short term
Future Potential- 25% increase possible if can take risk
Risk Level- medium
Future potential – 520 - 530 (2 to 4 month time frame)
Stop Loss – 480
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