Business
Jefferies raises Coal India target price, says valuation reasonable
It now models dispatch volumes to grow at 5% CAGR over FY26–28, with total dispatches rising from 735 million tonnes in FY26E to 810 million tonnes in FY28E.
Jefferies expects Coal India to be a key beneficiary of a rebound in electricity consumption, supported by forecasts of intense summer conditions and a higher probability of weak monsoons. The firm noted that subdued power demand had weighed on dispatches in recent periods, with volumes up just 1% year-on-year in FY25 and down 3% in 11MFY26, but it believes this trend should reverse as structural demand for power strengthens. “Recovery in power demand, amid expectations of intense summer and weak rains, should boost COAL’s volumes,” the report noted.
On pricing, the brokerage flagged higher international coal prices as a near-term positive for domestic e-auction realisations. Global thermal coal benchmarks have risen about 16% over the past week, and Jefferies is building in an e-auction premium of 63–69% over linkage coal for 4QFY26–FY28 versus a long-term average of 76%. “Higher global prices should lift domestic e-auction premiums too,” it said, while noting that e-auction volumes account for around 10% of Coal India’s total dispatches.
Despite rising captive coal production in the country, Jefferies believes Coal India’s competitive position remains intact, with the company holding roughly 60% share of India’s overall coal demand and about 75% of total coal production as of FY25. The report stresses that share gains for captive mines have largely come at the expense of imports, which still constitute 19% of demand and provide a “substitution buffer” as the government pushes to cut thermal coal imports.
Valuation remains the core pillar of Jefferies’ constructive stance. The stock trades at 9.3 times FY27 adjusted earnings per share, in line with its long-term average multiple of 9.2 times, and offers a dividend yield of about 6% on the brokerage’s estimates. “We find valuations reasonable with the stock trading at 9.3x FY27E PE (excl. stripping activity adjustments) in line with long-term average, and offering 6% dividend yield,” Jefferies said.
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It also highlighted that Coal India is valued at a steep 36% discount to NTPC on a one-year forward price-to-earnings basis, compared with a historical discount of around 15%.
The new target price of Rs 485 is based on 9.5 times FY28 adjusted earnings per share and implies a potential total stock return of 17%, including dividends. In its base case, Jefferies projects EPS rising to Rs 57 by FY28, up from Rs 48 in FY26, supported by EBITDA expansion from Rs 414 billion in FY26E to Rs 492 billion in FY28E.
In an upside scenario, the brokerage pegs the fair value at Rs 540, assuming slightly higher volume growth and 3–5% higher EBITDA versus the base case, while a downside scenario yields a target of Rs 370.
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Jefferies also underscored Coal India’s strong balance sheet and cash-generating profile, noting that the company remains in a net cash position and has rising cash per share despite generous dividends. Based on its estimates, the miner is expected to sustain annual dividends of Rs 26–28 per share over FY26–28, translating into payout ratios of 50–55%, reinforcing its appeal as a high-yield, cash-generative PSU play.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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Business
IT stocks in focus after Oracle’s strong results; Nuvama says valuations now attractive after correction
Oracle on Tuesday reported earnings that mostly surpassed market expectations. The company reported total revenue of $17.19 billion for the third quarter of fiscal year 2026, compared with analysts’ average estimate of $16.91 billion, according to data compiled by London Stock Exchange Group. The company also raised its revenue forecast for fiscal 2027 to $90 billion.
Oracle has increasingly positioned itself as a major cloud infrastructure competitor, challenging companies such as Amazon Web Services and Microsoft Azure. Amid this strategic shift, investors closely analyse the company’s earnings for signals about the broader AI and cloud computing economy. When Oracle meets or exceeds expectations, it often boosts confidence in the technology sector.
The positive sentiment driven by Oracle’s strong earnings pushed Wall Street higher in early trading hours before losing steam as investors weighed fading hopes for an earlier than expected end to the ongoing war between the United States, Israel and Iran. The tech heavy Nasdaq Composite gained 0.01%, while the Dow Jones Industrial Average fell 0.07% and the S&P 500 dropped 0.21%.
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Nuvama on IT services
Nuvama remained bullish on IT stocks, suggesting that the 20% correction seen since the beginning of the year due to expectations of AI led disruption in the sector following back to back AI tool launches by Anthropic has made valuations attractive.
“Reports of my death are greatly exaggerated,” Nuvama said, citing Mark Twain’s quote as perfectly explaining the current situation of the IT sector.“Given the advent and adoption of Gen AI, obituaries of the Indian IT services industry are being written all around. The concerns have been amplified by the sharp stock reactions, first with global SaaS and now with IT services companies,” it said.
The Indian IT services industry is at a crossroads again. The advent of a new technology, Gen AI, threatens to disrupt the way it has been functioning so far, thereby raising concerns about its near term growth and long term survival, Nuvama said.
It sees no existential threat from Gen AI and believes that the requirement for a system integrator, which can customise an enterprise’s plug and play software inputs and outputs as per its requirements, will always exist.
“We also note B2B adoption of any technology is very different from that of the B2C segment. Eventually, enterprises going for automation of tasks will still need someone to take ownership of the system and that will be IT services firms,” it added.
Nuvama, however, cautioned that Gen AI adoption will follow the technology adoption curve, and IT services firms will face cannibalisation of revenue in the initial phase, which they are facing currently, before reaching the inflection point.
“Following this, the opportunity will lead to an expansion of TAM (USD300 to USD400 billion by 2030, as per Infosys management). However, the companies are likely to undergo a pivot from a headcount driven to an outcome based revenue model. This will lead to lower headcount addition and lower correlation with revenue growth in coming years,” it added.
IT services model is here to stay
Nuvama believes the IT services model is here to stay and that the Gen AI disruption would only lead to bigger opportunities.
“Post the recent sharp correction, we find valuations of all stocks highly attractive,” it added.
“We see this as a deja vu moment for the industry and believe it will come out of this disruption just like earlier ones, with a net increase in its TAM. We remain positive on the sector from a medium to long term view. Near term volatility may persist,” Nuvama said.
It now has a ‘Buy’ call on all the top ten IT services stocks.
It upgraded HCLTech, Wipro, Tech Mahindra and Hexaware Technologies to ‘Buy’, and prefers LTIMindtree, Persistent Systems, Mphasis, Infosys and Tata Consultancy Services.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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Jamie Dimon, chief executive officer of JPMorgan Chase & Co., during the America Business Forum in Miami, Florida, US, on Thursday, Nov. 6, 2025.
Eva Marie Uzcategui | Bloomberg | Getty Images
JPMorgan Chase is reducing its exposure to the private credit industry by marking down the value of loans held by the bank as collateral, according to a person with knowledge of the moves.
The bank’s giant Wall Street trading division has reduced the value of loans — most of which were made to software firms — sitting within the financing portfolios of private credit clients, said the person, who declined to be identified speaking about the client interactions.
JPMorgan’s move indicates the biggest U.S. bank by assets wants to get ahead of potential turbulence involving private credit loans to software companies. CEO Jamie Dimon, who has guided his bank through multiple crises in his two decades atop JPMorgan, is known to constantly remind his executives about the risk that borrowers won’t be able to repay their loans.
Software firms have come under scrutiny in recent months as model updates from OpenAI and Anthropic drive concerns that some providers will be disrupted by AI. The worries have ignited a downcycle for private credit players as retail investors yanked funds in recent weeks, driving abnormally high redemptions at firms including Blue Owl and Blackstone.
The adjustments were made in JPMorgan’s financing business, where private credit firms borrow money to amplify fund returns in what’s known as “back-leverage.” The business is considered relatively risky because it layers leverage upon leverage — amplifying losses when the underlying loans sour.
By marking down the collateral for that leverage, JPMorgan is reducing the ability of private credit firms to borrow against their loans, and in some cases could even force firms to post more collateral.
The size of the loans impacted and the extent of the markdowns at JPMorgan couldn’t be determined.
JPMorgan is potentially the first major bank to take such steps, according to the FT, which was first to report the bank’s markdowns.
The moves are a preemptive step driven by changes in market valuations rather than actual loan losses, said the person with knowledge of the bank, who characterized the move as financial discipline, “rather than waiting until a crisis comes.”
JPMorgan previously pulled back leverage to the industry during the early days of the Covid pandemic, according to the person.
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