Coal India Ltd Gains 3.58%: 4 Key Factors Driving This Week’s Momentum

16 February: Strong Intraday Rally and Call Option Surge

Coal India Ltd began the week with a robust intraday performance, surging 3.18% to an intraday high of Rs.422.10 on 16 February 2026. This marked a significant rebound after five consecutive sessions of decline, with the stock closing at Rs.422.50, up 3.31% on the day. The rally outpaced the Sensex’s 0.70% gain, highlighting the stock’s relative strength within the Minerals & Mining sector.

Alongside the price surge, call option activity intensified markedly. The 420 strike price call contracts expiring on 24 February saw 10,370 contracts traded, generating a turnover of ₹639.78 lakhs and an open interest of 3,839 contracts. This elevated derivatives activity reflected bullish sentiment, with traders positioning for a potential breakout above the key 420 resistance level.

Technically, the stock traded above its 50-day, 100-day, and 200-day moving averages, signalling medium- and long-term strength, though it remained below the 5-day and 20-day averages, indicating short-term consolidation. The strong delivery volume of 38.39 lakh shares on 13 February further confirmed growing investor participation.

16 February: Valuation Shift Reflects Changing Market Perception

On the same day, Coal India’s valuation profile underwent a notable shift from very attractive to attractive, reflecting evolving market perceptions amid price volatility. The stock’s price-to-earnings ratio stood at 8.44, comfortably below sector averages, while the price-to-book value ratio was 2.39, near the midpoint of its historical range. Enterprise value multiples such as EV/EBITDA at 5.68 and EV/EBIT at 7.55 further underscored the stock’s relatively low valuation compared to peers.

Profitability metrics remained robust, with a return on capital employed of 40.03% and return on equity of 29.62%, supporting the company’s fundamental strength. The dividend yield of 5.12% added to the stock’s appeal for income-focused investors. Despite these positives, the downgrade in the MarketsMOJO mojo grade to Hold on 11 February 2026 signalled a more cautious stance amid sector uncertainties and valuation adjustments.

17-19 February: Consolidation Amid Mixed Market Signals

Following the strong start, Coal India’s share price experienced a mild correction over the next three trading days. On 17 February, the stock slipped 0.22% to Rs.421.55, while the Sensex advanced 0.32%. The decline continued on 18 February with a 0.87% drop to Rs.417.90, despite the Sensex gaining 0.43%. On 19 February, the stock further eased 0.41% to Rs.416.20, underperforming the Sensex’s 1.45% decline.

These movements reflected short-term consolidation and profit-booking, with delivery volumes on 19 February falling 38.7% below the five-day average, indicating cautious investor participation in the cash segment. Technical indicators showed the stock trading below the 5-day and 20-day moving averages, suggesting resistance levels remained intact.

20 February: Call Option Spike and Price Recovery

Coal India closed the week on a positive note, gaining 1.78% on 20 February to Rs.423.60, outperforming the Sensex’s 0.41% rise. The stock’s recovery was supported by a surge in call option activity, with 5,522 contracts traded at the 425 strike price expiring on 24 February, generating a turnover of ₹27.36 crores and an open interest of 1,580 contracts. This concentration of bullish bets indicated market expectations of a moderate rally in the near term.

Technical indicators showed the stock trading above its 5-day, 50-day, 100-day, and 200-day moving averages, signalling long-term strength, though it remained just below the 20-day average, suggesting some short-term resistance. The stock’s dividend yield rose to 6.36%, enhancing its appeal for income-focused investors amid a low interest rate environment.

Despite the positive momentum, the MarketsMOJO mojo score remained at 64.0 with a Hold rating, reflecting a cautious outlook amid mixed technical signals and sectoral uncertainties. The stock’s market capitalisation stood at ₹2,56,493 crores, confirming its large-cap status and liquidity.

Weekly Price Performance Comparison

Key Takeaways

Positive Signals: Coal India’s 3.58% weekly gain significantly outperformed the Sensex’s 0.39% rise, driven by strong intraday rallies and sustained bullish call option activity. The stock’s trading above key medium- and long-term moving averages and a rising dividend yield of 6.36% underscore its fundamental strength and income appeal. Robust profitability metrics and a large market capitalisation provide additional support.

Cautionary Notes: The downgrade to a Hold mojo grade and the valuation shift from very attractive to attractive reflect a more cautious market stance amid sector volatility and near-term resistance levels. Short-term technical indicators, including resistance near the 20-day moving average and declining delivery volumes midweek, suggest consolidation and potential profit-booking. Investors should monitor price action closely around the 420-425 strike price levels ahead of the 24 February expiry.

Conclusion

Coal India Ltd’s performance in the week ending 20 February 2026 was characterised by a strong recovery and bullish positioning in the options market, signalling renewed investor confidence despite a cautious mojo rating. The stock’s ability to outperform the broader market and maintain solid fundamentals, including a healthy dividend yield and attractive valuation multiples, supports its medium- to long-term appeal. However, short-term consolidation and technical resistance warrant a measured approach as expiry approaches. Overall, Coal India remains a key player in the Minerals & Mining sector, balancing income generation with growth potential amid evolving market dynamics.

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