Coal India Share Price Jumps Over 3% Despite Market Crash – Here’s Why
Coal India shares surged over 3.27% on Friday, February 28, reaching ₹375.75 per share on the BSE, even as the broader stock market witnessed a sharp decline. This rally comes amid a massive sell-off in the Indian equity markets, where both Sensex and Nifty 50 dropped by over 1%, wiping off more than ₹6 lakh crore of investors’ wealth.
So, what’s driving Coal India’s stock higher while the rest of the market is in red? Let’s find out.
Why Is its Share Price Rising?
The primary reason behind the surge in it’s stock price is a fresh additional charge announced by its subsidiary, Northern Coalfields Ltd (NCL).
- Northern Coalfields Ltd (NCL) has introduced a Singrauli Punarasthapan charge of ₹300 per tonne over and above the existing notified price on its entire coal volume.
- This charge will be applicable from May 1, 2025, leading to an increase in revenue for it.
- The move signals strong pricing power for the company and is expected to boost profitability in the long run.
This development has positively impacted investor sentiment, leading to a rally in Coal India’s stock, despite the broader market weakness.
Stock Market Crash – A Brief Overview
On February 28, 2025, the Indian stock market experienced a significant crash:
- The Sensex tumbled by over 1,000 points.
- The Nifty 50 fell below the crucial 22,250 level.
- Investors lost over ₹6 lakh crore in a single trading session.
The sell-off was triggered by global economic concerns, rising bond yields, and profit-booking by institutional investors. However, Coal India managed to defy the market trend, proving its resilience in uncertain times.
What’s Next for its Share Price?
Analysts believe that Coal India’s recent move could lead to:
✔️ Higher revenue generation – Additional levy on coal dispatches will add to earnings.
✔️ Stronger margins – Pricing power allows Coal India to improve profitability.
✔️ Increased investor confidence – A steady revenue stream makes the stock more attractive.
Additionally, Coal India’s dividend yield, strong financials, and monopoly status in India’s coal industry continue to make it a defensive bet during market volatility.
Key Financial Ratios & Data
| Metric | Value |
|---|---|
| Current Market Price (CMP) | ₹375.75 |
| Market Capitalization | ₹2.30 lakh crore |
| P/E Ratio | 6.75x |
| Dividend Yield | 6.50% |
| ROE (Return on Equity) | 42.3% |
| ROCE (Return on Capital Employed) | 55.8% |
| Debt-to-Equity Ratio | 0.10 |
These financial indicators highlight it’s strong fundamentals, making it a preferred choice for investors looking for stability and high dividends.
Should You Invest in it Now?
Given its attractive valuations, high dividend yield, and strong earnings potential, many analysts consider Coal India a solid long-term investment.
However, investors should also keep an eye on:
❗ Coal demand fluctuations – Any dip in industrial demand can impact earnings.
❗ Government policies – Changes in coal pricing or taxation can affect margins.
❗ Environmental concerns – Shift towards renewable energy can pose long-term risks.
Overall, Coal India remains a strong PSU stock, offering growth potential, dividend income, and a defensive hedge against market volatility.
Conclusion
Despite a stock market crash, it’s share price surged over 3%, thanks to the introduction of an additional charge on coal dispatches by its subsidiary Northern Coalfields Ltd.
With strong financials, high profitability, and a dominant market position, Coal India continues to be a favorite among investors looking for stability and long-term growth.
Would you consider investing in Coal India after this rally? Let us know your thoughts!
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.