President of India-backed multibagger coal mining company bags new order from Ministry of Mines, Government of India
The shares of the company have a PE of 8x, an ROE of 53 per cent and an ROCE of 65 per cent.
Coal India Limited (CIL) has been awarded a composite license (prospecting and mining) for the Khattali Chhoti Graphite Block located in Alirajpur, Madhya Pradesh, by the Ministry of Mines, Government of India. This marks CIL's first foray into mining minerals other than coal.
The key details of the license are as follows:
- CIL will pay a mining premium of 150.05 per cent of the value of minerals dispatched to the Madhya Pradesh state government.
- CIL will receive a composite license within one year after completing the required formalities.
- The total area of the block is nearly 600 hectares.
This project is significant for a few reasons. First, it reduces India's dependence on graphite imports, as the country currently imports about 69 per cent of its graphite needs. Second, graphite is a critical material for lithium-ion batteries, which are used in electric vehicles and energy storage systems. With the growing demand for these technologies, the graphite market is expected to see significant growth in the coming years. Finally, CIL's decades of experience in mining will be an asset in developing this new graphite block.
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About the Company
Coal India Ltd, a giant public sector company under India's Ministry of Coal, is the world's largest coal producer. Established in 1973 through the nationalization of the coal industry, Coal India Ltd mines and produces coal, operating washeries to process it. Their primary customers are power and steel plants, but they also supply coal to cement factories, fertilizer companies, and brick kilns.
The company has a market cap of over Rs 3 lakh crore and has been maintaining a healthy dividend payout of 51.8 per cent. The shares of the company have a PE of 8x, an ROE of 53 per cent and an ROCE of 65 per cent. The stock gave multibagger returns of 115 per cent in just 1 year whereas BSE Sensex Index is up by 21 per cent. Investors should keep an eye on this Large-Cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.
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