Coal India Ltd. (COAL), the world’s biggest producer of the fuel, reached a record in Mumbai on optimism higher prices will boost fourth-quarter earnings due this week.
Shares of the Kolkata-based company climbed as much as 5.2 percent to 388.9 rupees, the highest price since the stock’s trading debut in November, and traded at 387.8 rupees as of 2:32 p.m. local time. The shares have gained 23 percent this year, compared with a 9.5 percent decline in the benchmark Bombay Stock Exchange Sensitive Index.
The company raised prices by 30 percent for certain grades on Feb. 27., which will increase revenue by 6.5 billion rupees in the year ended March 31, it said in a statement on Feb. 28. Chairman N.C. Jha last month said the company will decide on increasing prices for the second time this year as a revision in wages is due July 1. Earnings are due on May 12.
“There is expectation that profit will rise significantly in the fourth quarter because of the hike in prices,” Rakesh Arora, head of research at the Indian unit of Macquarie Group Ltd., said from Mumbai. “That is boosting share prices.”
Coal India and its units may report a net income of 36.5 billion rupees in the quarter ended March 31, according to the average estimate of nine analysts surveyed by Bloomberg News. Profit was 26.3 billion rupees in the three months ended Dec. 31. The company hasn’t announced earnings from a year earlier.
To contact the reporter on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.net
To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.
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