Is Coal India a Good Long-Term Investment?

Investing in the stock market can be a lucrative strategy, but careful analysis is crucial for making informed decisions. One prominent company that has garnered attention among investors is Coal India Limited (COALINDIA). This article delves into the key factors that make COALINDIA an intriguing long-term investment opportunity.

Profit Growth

Over the past five years, Coal India Limited has demonstrated commendable profit growth. With a Compound Annual Growth Rate (CAGR) of 32.0%, the company has consistently shown resilience and strong financial performance. In the trailing twelve months (TTM), the company has achieved an impressive profit growth of 62%. These figures highlight the company's ability to generate consistent earnings, which is a crucial factor for long-term investments.

Stock Price CAGR

Regarding the share price performance, over the last three years, COAL INDIA’s stock price has witnessed an increase of 18%. Over the span of one year, the share price has risen by 26.2%, and over the past six months, it has surged by 60%. These significant gains underscore the potential for capital appreciation, which is a key aspect of long-term investment.

ROE Growth

The company’s Return on Equity (ROE) for the past three years stands at a solid 46.8%, indicating a healthy utilization of shareholders’ funds. In the most recent year, the ROE has further improved to 56%, suggesting an efficient use of capital to generate profits.

Sales/Revenue Growth CAGR

Coal India has also demonstrated notable sales growth. Over the past three years, the company has achieved a Compound Annual Growth Rate (CAGR) of 13%, which has increased to 26% in the TTM period. This signifies robust revenue expansion for the organization, which is a positive indicator for future growth.

Recent Quarters and Performance Indicators

For a more detailed analysis, consider visiting Daily Stocks Dekho's comprehensive analysis. Here are some key highlights from the September 2022 quarter:

Sales QoQ Growth: 28.11% QoQ Earning Growth: 111.82% NPM: Above the five-quarter average, trending up to 20.26 Sales Growth Trend: Trending down with a QoQ decline of -14.97% Net Profit Growth: Trending up with a QoQ decline of -31.97%

The company is categorized as a Large Cap in the Coal business sector, and over the past four quarters, four quarters have shown positive growth, indicating a positive trend.

Algo-Based Indicator

An algorithm-based indicator suggests that at the current price of 231.4, COAL INDIA is being held. The current price is close to the previous high, and the algorithm-based upside potential is 6.7%, while the downside risk is 20.1%. The price has been relatively stable, having moved by 9.02% over the quarter.

Conclusion

While COAL INDIA has demonstrated strong profitability and revenue growth, it is essential to conduct a thorough analysis before making long-term investment decisions. The stock market is subject to volatility, and historic performance may not always be indicative of future results. Readers should conduct their own careful and thorough analysis.

Disclaimer

This content is for educational purposes only. No recommendations are being made. Readers should conduct their own research and analysis before making any investment decisions. Investing in the stock market carries risks, and information may change over time.