In this article, we look at two dividend-paying stocks, one from the mining and minerals sector and the other from the FMCG sector, to buy for an upside potential of up to 25%, recommended by the Trade Brains Portal. Further, we analyze the market’s performance yesterday and also look at some stocks to watch out for today.
1. Coal India Ltd
- Current price: ₹ 400
- Target price: ₹ 492
- Upside: 23%
- Time frame: 12 months
Why it’s recommended
Coal India Ltd. is the largest coal producer in India and operates through 84 mining areas spread over eight states of India. It is a “Maharatna” central PSU under the control of the Ministry of Coal, with 63.13% ownership by the Government of India. It has 310 mines and did 781 million tonnes of coal production as of FY25, which has been growing by 6.9% CAGR since FY21.
Despite concerns of privatization in coal mining through government auction, the company enjoys a monopoly, controlling 48% of India’s proven reserves and contributing 78% of the total domestic coal production. It manages a total of 310 mines as of FY25. In FY25, the company’s total dividend stood at Rs 16,331 crore, growing at a CAGR of 13.4% in the last 5 years, up 4% YoY.
The total dividend per share for FY25 stood at Rs 26.5 per share, and their dividend yield was at 6.6%. Since the IPO, the company has paid more than Rs 171,700 crores as dividends. For FY25, the board approved the final dividend of Rs 5.15 per share.
Revenue from operations stood at Rs. 1,43,369 crore as of FY25, which has been growing at 12% CAGR since FY21. The net profit of the company stood at Rs 35,302 crore, which has been growing by 29% CAGR since FY21. The company has significantly improved its margins through better cost realizations. Net profit margin stood at 24.6% in FY25, up from 15.36% in FY21, with a dividend payout ratio of 46%.
Additionally, CIL has distributed Rs 5.15 per share as a final dividend for FY25, along with an interim dividend of Rs 5.60 and Rs 15.75 per share. CIL has a high dividend yield of 6.5% for FY25. Furthermore, on its operational side, CIL has significantly improved its output per man-shift, from 15.09 in FY21 to 24.84 in FY25.
The company expects to achieve 1 billion tons of coal production by 2028-29 and 1.22 billion tons of coal production by 2034-35. The company plans to do a capex of Rs 16,000 crore to increase its washing capacity, coal mining capacity, first mile connectivity (FMC) projects, and development of rail infrastructure for improving evacuation capabilities.
In November 2024, CIL commissioned its largest solar installation to date, a 50 MW plant at Nigahi under Northern Coalfields Limited, demonstrating its diversification towards renewable energy as India strives to reach 500 GW from non-fossil sources by 2030.
Additionally, Coal India plans to supply 4500 MW of carbon-free energy, in a phased manner, to upcoming green ammonia facilities, making it one of the world’s largest renewable energy contracts. India achieved a historic milestone by surpassing 1 billion tonnes of coal production as of 20 March 2025. Coal remains crucial, contributing 55% to the national energy mix and fueling over 74% of total power generation.
Risk factor
CIL needs environmental and forest approvals, especially in greenfield projects; if there are delays in these approvals, it can impact the operations. The company is highly vulnerable to sociopolitical factors like tribal and local community protests, political pressure, and regulatory requirements. The company currently has a shortage of last-mile connectivity and logistics infrastructure. Privatization in coal mining may also impact the monopoly status in the long term.
Also read: 1400% Dividend: Oil stock jumps 3% after announcing strong Q4 result and dividend
2. ITC Ltd
- CMP: ₹ 426
- Target: ₹ 495
- Upside: 16%
- Time frame: 12 Months
Why it’s recommended
ITC is one of the largest FMCG companies in India, with a diverse portfolio of companies in the fields of information technology, agribusiness, paperboards and packaging, and fast-moving consumer goods. In the Indian paperboard and packaging sector, the company leads the market. Over the past ten years, ITC Consumer Goods has established itself with around twenty-five top-tier Indian brands, such as Yippee, Sunfeast, and Aashirvaad.
The company’s FY25 revenue from operations was Rs 81,612.78 crore, a 10.4% increase over Rs 73,891.43 crore in FY24. Their net profit jumped by 69% YoY from Rs 20,751.36 crore in FY24 to Rs 35,052.48 crore in FY25. Segment-wise, cigarette segment revenue was up 6.6% YoY, whereas revenue from others grew by 4.8% in FY25, and the total FMCG revenue is up 5.9% YoY.
Paperboard and packaging revenue is up 0.96%, and the Agri segment revenue saw a growth of 25% YoY, led by leaf tobacco, value-added agri products, and rice exports. The board declared an interim dividend of Rs 6.5 per share and has recommended a final dividend of Rs 7.85 per share; thus, the total dividend for FY25 would be Rs 14.35 per share. ITC’s dividend yield stands at 3.37%.
With an installed capacity of 4.8 lakh MTPA, ITC announced that it would acquire ABREL’s pulp and paper company, known as “Century Pulp and Paper,” for a lump sum payment of up to Rs 3,500 crores on a cash-free, debt-free basis.
Additionally, ITC has purchased shares in Sresta Natural Bioproducts Private Limited (‘SNBPL’) brand 24 Mantra Organic, a leader in organic packaged foods with a portfolio that includes more than 100 organic products, as part of its FMCG division. The company will have a competitive advantage because of its vertically integrated supply chain and robust network of 27,500 farmers across 1.4 lakh acres of certified organic land in 10 states.
Additionally, the business paid Rs 50.6 crore to buy Mother Sparsh Baby Care Private Limited (also known as “Mother Sparsh”), a company that operates in the high-end ayurvedic and natural baby care. ITC has now increased its shareholding from 26.50% to 39.47%. Over the course of two to three years, ITC invested Rs 81 crore, or a total of Rs 126 crore, to purchase the remaining 73.5% of Mother Sparsh.
Risk Factor
The company’s tobacco division is heavily regulated. The business may be significantly impacted by any significant regulatory development. They make a very concentrated amount of money from the tobacco business.
ITC is a low-margin, extremely volatile company whose raw materials in agricultural commodities are vulnerable to climate change. Crop yield variation may have a negative effect on a business’s operations. The business is nevertheless vulnerable to the effects of modifications to the legal requirements governing the handling of manufacturing waste and residual discharge.
Market Recap May 22, 2025
On Thursday, May 22, 2025, Indian equity markets slipped into negative territory, snapping the previous day’s rebound. The fall was driven by weak global cues, including a rise in U.S. Treasury yields and concerns over the fiscal outlook in the United States. Investors turned risk-averse, leading to broad-based selling across sectors.
The benchmark Nifty 50 index opened at 24,726.15 and ended the session at 24,609.70, declining by 203.75 points, or 0.82 percent. Likewise, the BSE Sensex dropped by 644.64 points, or 0.79 percent, to close at 80,951.99. Both indices traded below intraday highs, reflecting the pressure from global sentiment. Despite this correction, they remain above key exponential moving averages, maintaining a cautiously bullish structure over the medium term.
Sectorally, the market saw divergence across key indices. Nifty Media emerged as the top gainer, climbing 1.18 percent, led by gains in ZEEL and Network18. On the downside, NIFTY FMCG was the worst-performing index, slipping 1.44 percent amid selling pressure in Colgate-Palmolive and Varun Beverages. Nifty IT also faced weakness, falling 1.31 percent as Infosys and TCS came under pressure due to global tech sector concerns. The mixed performance highlights sector-specific dynamics influenced by earnings expectations and global cues.
The broader market indices reflected the cautious sentiment prevailing in the Indian stock market. The Nifty Midcap 50 index declined by 0.81%, settling at 15,759.25, indicating profit-booking in mid-cap stocks. Similarly, the Nifty Smallcap 100 index fell by 0.26% to close at 17,503.10, as investors shifted focus away from smaller companies amid global uncertainties.
Globally, Dow Jones Industrial Average futures fell by 0.69 percent to 41,917 USD, reflecting investor concerns over rising U.S. Treasury yields and ongoing geopolitical tensions. Asian markets also came under pressure, with Hong Kong’s Hang Seng Index dropping 1.19 percent to close at 23,544.31, weighed down by concerns over U.S. fiscal policies. Meanwhile, Japan’s Nikkei 225 declined 0.84 percent to 36,985.87, impacted by a stronger yen and softer trade data, raising worries about export competitiveness.
Overall, the Indian markets mirrored the global mood, closing lower as investors reassessed risk amidst ongoing macroeconomic uncertainties. With volatility expected to persist, traders are likely to remain cautious in the sessions ahead.
Stocks to watch out for on May 23
Udaipur Cement Works Ltd.: Revenue from operations grew by 36% YoY and stood at Rs. 487.51 crore. Profit after tax stood at Rs. 39.59 crore, up by 114% YoY.
Honasa Consumer Ltd.: Revenue from operations grew by 12% YoY and stood at Rs. 499.36 crore. Profit after tax stood at Rs. 22.64 crore, down by 15% YoY.
Firstsource Solutions Ltd.: Firstsource announced a partnership with Sanas, a company offering real-time speech understanding solutions. This collaboration brings accent translation technology into Firstsource’s customer service operations.
Mehai Technology Ltd.: Revenue from operations grew by 1,067% YoY and stood at Rs 55.27 crore. Profit after tax stood at Rs. 1.01 crore, up by 385% YoY.
Dwarikesh Sugar Industries Ltd.: Revenue from operations grew by 20% YoY and stood at Rs.459.07 crore. Profit after tax stood at Rs.46.33 crore, up by 102% YoY. The company has approved a dividend of Rs.0.50 per share.
Deepak Fertilizers & Petrochemicals Corp Ltd.: Revenue from operations grew by 26% YoY and stood at Rs.2,716.99 crore. Profit after tax stood at Rs.277.86 crore, up by 21% YoY.
NTPC Green Energy Ltd.: The company secured an 80MW-320MWh Battery Energy Storage Project in Kerala.
Major companies announcing results today
- Aditya Birla Fashion and Retail Ltd
- Afcons Infrastructure Ltd
- Apollo Micro Systems Ltd
- Ashoka Buildcon Ltd
- Ashok Leyland Ltd
- Azad Engineering Ltd
- Balkrishna Industries Ltd
- BEML Ltd
- Camlin Fine Sciences Ltd
- Cello World Ltd
- Devyani International Ltd
- Dreamfolks Services Ltd
- Exicom Tele-Systems Ltd
- Finolex Industries Ltd
- Glenmark Pharmaceuticals Ltd
- Gopal Snacks Ltd
- GPT Healthcare Ltd
- JSW Steel Ltd
- Kernex Microsystems India Ltd
- Prakash Industries Ltd
- Ramco Industries Ltd
- Timken India Ltd
- Transrail Lighting Ltd
- Tinna Rubber and Infrastructure Ltd
- VIP Clothing Ltd
About: Trade Brains Portal is a stock analysis platform. Its trade name is Dailyraven Technologies Private Limited, and its SEBI-registered research analyst registration number is INH000015729.
Investments in securities are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
The post 2 Stocks to buy now for an upside of up to 23%; Recommended by Trade Brains portal appeared first on Trade Brains.