Discover the secrets of
predicting stock moves with a powerful blend of fundamental analysis and
Elliott Wave Theory-based technical insights!
- Fundamental Analysis
- Technical Analysis
Coal India Limited (CIL) is a global leader in coal production and a vital contributor to India’s energy needs. Understanding its recent performance helps traders gauge its operational and financial standing.
In
FY 2023-24, CIL produced 773.65 million tonnes (MT) of coal, achieving 99.16%
of its annual target of 780.20 MT. This marks a 10.02% increase compared to
703.2 MT produced in the previous year. Five subsidiaries—BCCL, CCL, NCL, WCL,
and MCL—surpassed their production targets. Among them, MCL made history by
becoming the first coal company in India to produce over 200 MT, contributing
206 MT, which is 27% of CIL’s total output.
CIL’s
net profit for FY24 was₹37,369 crore, up 17.8% from₹31,723 crore in FY23. The
net profit margin also improved, reaching 47.7% compared to 40.5% last year.
However, cash flow from operations declined to ₹18,103 crore from ₹35,734 crore
in FY23, signalling a need to boost operational cash flow in the coming year.
For
the first time since 2010, CIL reversed the declining trend in underground
mining, producing 26.02 MT in FY24, a 2.1% increase from 25.49 MT in FY23.
Despite these achievements, the company faced a 16.09% drop in revenue in the
latest quarter, marking its lowest quarterly revenue in three years.
CIL
maintains a strong financial position, with almost zero debt and a solid return
on equity (ROE) averaging 52.8% over three years. It also offers a high
dividend yield of 6.66%, making it a favourite for income-focused investors. At
the current price of ₹386.1 per share, the stock is undervalued by about 16%,
suggesting potential growth opportunities.
In
summary, Coal India’s performance in FY24 showcases its critical role in
India’s energy supply and commitment to excellence. While its near debt-free
status and regular dividends attract investors, the recent revenue dip calls
for close monitoring by traders and stakeholders.
Technical Analysis
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| Figure - 1 |
The chart shows a long-term
price action of Coal India Ltd on a quarterly timeframe (3M candlesticks).
The stock experienced a downtrend
from 2015 to 2020, followed by a strong
recovery from 2021 onwards.
The price action from 2024,
suggests a retracement after a strong
bullish move, possibly forming a wave
correction before the next leg up.
The overall structure appears to be a completed corrective phase, transitioning into a new impulsive wave.
 |
| Figure - 2 |
The
chart suggests a zigzag correction (5-3-5), where Wave A is the initial
decline, Wave B is the retracement, and Wave C completes the correction with
another downward move.
The
Wave C bottomed around 2020-2021, forming a significant low before reversing
into an uptrend.
After
the C wave, the stock seems to have started a strong impulsive move. The price
has experienced a sharp rally from 2021 to 2024, indicating a trend reversal
after the corrective phase.
 |
| Figure - 3 |
In the chart, two major
corrective waves are marked:
·
The first corrective wave (Black, 2017-2020)
·
The second corrective wave (Red, 2020-2024)
The First Corrective Wave lasted from 2017 to 2020 and represents a major bearish phase in the stock. The price gradually declined during this period, forming a complex correction that eventually bottomed out and was labelled Wave C (black) in 2020.
The final low of this
correction is, marking the end of a larger-degree corrective structure.
The second corrective wave, marked in red (A-B-C), occurred after a strong rally from 2021 to 2024, potentially completing a larger-degree structure.
This is a classic ABC
correction, which usually occurs after a strong impulsive move.
The first sharp drop after the
strong uptrend indicates the start of the correction.
 |
| Figure - 4 |
In this chart, the ABC correction is marked in red. According to Elliott wave theory, the C is always made up of five sub-waves. Currently, the price appears to be in a corrective phase after completing the full 5-wave upward impulse.
 |
| Figure - 5 |
The
daily chart analysis indicates that following the completion of the red Wave C,
the price has entered another corrective phase, unfolding as an A-B-C (green)
structure. Within this correction, Wave C (green) has extended precisely to the
161.8% Fibonacci projection of Wave A (green), reinforcing the likelihood of a
measured move completion. This alignment suggests that the corrective decline
may have reached exhaustion, potentially setting the stage for a reversal or a
new impulsive sequence.
 |
| Figure - 6 |
The
daily chart of Coal India Limited presents a fascinating corrective structure.
We're observing a classic A-B-C correction (marked in green), where wave C is
particularly interesting as it's manifesting as a textbook 5-wave impulse
decline (marked in black numbers). This aligns perfectly with Elliott Wave
theory, which states that C waves typically unfold in five waves.
The
most critical observation is that Wave 5 appears incomplete. According to
Elliott Wave principles, fifth waves often complete the pattern with a final
decisive move. In this case, since Wave 5 is still unfolding, we might expect
additional downside movement before the entire correction concludes.
 |
| Figure - 7 |
This
hourly chart of Coal India Limited presents an intriguing development within
the final fifth wave of the larger C wave decline. The fifth wave (black) is
developing as a textbook five-wave impulse structure, with its sub-waves
clearly labelled in pink (i, ii, iii, iv, v).
The
wave iv (pink) is exhibiting a classic fourth wave pattern (complex correction)
It
has formed a sideways consolidation pattern, shows decreased momentum compared
to wave iii, and Demonstrates the typical choppy, overlapping price action
characteristic of fourth waves
Currently,
we're observing the early stages of wave v (pink), and the pattern suggests
this final sub-wave remains incomplete. The projected trajectory (marked by the
pink arrow) indicates a likely continuation of the decline to complete the
overall five-wave sequence.
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| Figure - 8 |
The
daily chart reveals a fascinating multi-layered wave structure. Let me break
down the current and projected movements:
We
can observe that a larger ABC correction (marked in red) was completed earlier,
followed by another correction ABC (in green)
Currently,
we're seeing what appears to be Wave A (blue circle) of a new larger-degree
corrective pattern.
Following
the completion of Wave, A (blue circle), Elliott Wave theory suggests we should
expect a Wave B rally.
Wave
B (blue circle) typically retraces between 38.2% to 78.6% of Wave A's decline
Based
on the projection (shown by blue lines), Wave B could potentially reach the 480-level
unfolding into three sub-waves.
After
Wave B is completed, a Wave C (blue circle) decline would be expected to complete
the larger correction in 5 sub-waves.
The
projected path suggests Wave C could extend below the Wave A lows, which is
common in corrective patterns.
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| Figure - 9 |
This
analysis suggests traders might find opportunities in the anticipated Wave B
rally while keeping in mind that it would likely be temporary before the
larger correction continues with Wave C.
I am not a SEBI-registered financial advisor. The analysis and views shared here are purely for educational and informational purposes and should not be considered as financial advice or investment recommendations. Trading and investing in the stock market carry a high level of risk, and past performance is not indicative of future