Two charts for coal spot prices for last one year and last five...

Two charts for coal spot prices for last one year and last five years reflects a marked change and elevated coal prices. Before Oct 21, most of the time Av coal prices are around USD 100. This should be taken as a long term coal prices. However a marked global scenario has changed quite quickly for energy sector. There was hardly any investment in exploring and new projects during Covid period of 2019-21. Additional demand for energy sector reduced significantly and it was taken as a win for renewable energy projects over conventional energy projects.

Post Covid demand for energy has gone up significantly and current rise in interest rate by central bank to suppress the demand is a late effort. Russian invasion has compounded the demand for export energy market. This elevated energy prices has still not reflected in the current SP of our coal players like WHC, NHC and YAL. These are not impacted by revised coal levies as well.
Current high spot price will support the revenue for next three months. By that time winter in north hemisphere will compound the demand for coal.
I am of the view that due to limited new scope for new supply and longer geopolitical situation the future medium term prices of coal will be above USD 175 to USD 200. The revised financial model with new elevated coal prices will significantly change the target price for SP. Most of the investment bankers are very conservative and especially for coal based companies. It is likely that most of the investment companies will continue to reflect the target prices between 6 to 7.5 only. Additionally most of the super funds avoid these companies due to lack of Mande as well.
With huge cash flow, buyback program and responsive management of late, it is a good sector to be invested in current scenario.
DYOR