PremiumCoal India Q1 Results: Coal India (CIL) released its April-June quarter results for fiscal 2023-24 (Q1FY24) on August 8. The state-run miner reported a decline of 10 per cent in consolidated net profit at ₹7,941.4 crore, compared to ₹8,834.22 crore in the corresponding period last year. The largest coal producer's revenue from operations in the first quarter of current fiscal stood at ₹35,983.2 crore, reporting a rise of 2 per cent, compared to ₹35,092.17 crore in the year-ago period. Coal India share price fell over 1 per cent ahead of the announcement of Q1FY24 results today.
CIL was expected to report weak earnings in the quarter-under-review. Analysts expected that the results were likely to be impacted by correction in coal prices, lower e-auction premiums and higher wage cost.
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Shares of Coal India will be in focus during tomorrow's trading session. On Tuesday, shares settled 1.12 per cent lower at ₹230.25 apiece on the BSE.
Out of the total sale of ₹33,072.6 crore during the quarter, ₹31,757 crore came from the net sales of raw coal. The quantity of raw coal sold was 183.6 million tonnes and the average realization was ₹1,729.53 per tonne.
The amount realized from the sale of 2.08 million tonnes of washed coal was ₹916.5 crore with average realization coming at ₹4,405.3 per tonne, said Coal India.
The production of raw coal rose 9 per cent to 175.4 million tonnes during Q1 from 159.9 million tonnes during the same period last year. The off-take of raw coal increased to 186.9 million tonnes during the quarter from 177.4 million tonnes during Q1FY23.
On the operating front, the coal-miners' earnings before interest, taxes, depreciation, and amortization (EBITDA) during the June quarter came in at ₹10,513.8 crore, registering a decline of 14.5 per cent, compared to ₹12,251 crore in the year-ago period. The EBITDA margin dropped by 580 bps to 29.1 per cent, compared to 34.9 per cent in the same period last year.
The net sales of the company grew marginally to ₹33,072.6 crore during the quarter under review from ₹32,497.9 during Q1FY23. Sequentially, Coal India's net profit jumped 43 per cent from ₹5527.6 crore during the quarter ending March 2023.
The largest coal producer's revenue from operations in the first quarter of current fiscal stood at ₹35,983.2 crore, reporting a rise of 2 per cent, compared to ₹35,092.17 crore in the year-ago period.
The state-run miner reported a decline of 10 per cent in consolidated net profit at ₹7,941.4 crore, compared to ₹8,834.22 crore in the corresponding period last year.
Coal India has a market capitalization of ₹143,591.57 crore. The 52-week high for the stock is ₹263.3 and the 52-week low is ₹205.5. The stock had a BSE volume of 244,023 shares. Coal India has a market capitalization of ₹143,591.57 crore
According to estimates from brokerage houses including Motilal Oswal Financial Services Limited, Kotak Institutional Equities, Axis Securities and Elara Capital, Coal India is expected to report a net profit of ₹6,125 crore, down from ₹8,834 crore in the corresponding period last year.
Coal India reported a 13.4 per cent year-on-year rise in coal production at 53.6 million tonnes (MT) in July 2023. At 53.6 MT, the production was up by 6 MT from the 47.3 MT output of July last year.
Coal India share price shed 0.94% to end at ₹230.65 apiece on the BSE ahead of the announcement of Q1 results today.
Coal India reported a net profit of ₹5,527.62 crore in the quarter ending March 2023, a drop of 18% from ₹6,715.00 crore, YoY.
The company’s profit after tax (PAT) for FY 2022–23 grew by 62% to ₹28,125 crore from ₹17,378 crore in FY22. Higher volume sales and increased premiums in e-auction bolstered the company’s profitability.
Coal India share prices fell over 1% ahead of the release of Q1 results today. Coal India stock declined as much as 1.48% to ₹229.40 apiece on the BSE.
Coal India’s over burden removal (OBR) continues its runaway pace as the company excavated 497.5 million cubic metres (M.CuM) of OB during April-June 2023 period with the comparative period growth hovering high at around 30%.
Coal prices have steeply corrected—resulting in an earnings decline for Coal India. Coal India produced 703 MT, up 13% YoY and off-take was 695 MT, up 5% YoY. However, in FY24E Coal India eyes 780 MT in production/ offtake, which is up 77 MT over FY23.
These targets depend on higher electricity demand and subsequent rake availability. It is expected to invest ₹600 billion in capex over the coming four fiscals to reach 1 btpa capacity. In May 2023, e-auction coal sales garnered a bid premium of 78% over notified prices. This indicates a striking contrast against the levels of 425% recorded in May 2022, Antique Stock Broking said.
Non-power sector consumers continue to receive higher quantities of coal in the current fiscal, which at the first quarter ended June 2023 was at 33.4 MTs, logging a robust growth of 34%.
Coal India would achieve the 780 million tonne (MT) output target of FY 2024 with all efforts and means available at its disposal, said Coal India’s newly appointed Chairman PM Prasad.
He added, “on the supply side ensuring uninterrupted coal flow to the power sector is another priority area."
Bolstering CIL’s 780 MT target chase, production during Q1 FY 2024 shot up to 175.5 MTs, the highest ever recorded during first quarter of any year, with near 10% growth. Expansion in volume terms was 15.7 MTs. Read here
Coal India’s offtake for the April-June quarter grew 5.3% to 187 MT from 177.5 MT in last year period.
For the month of June, Coal India’s offtake at 61 MT registered a growth of 3.6% from 58.9 MT.
Coal India’s subsidiaries registered double-digit production growth during the April-July 2023 period.
In April-July 2023 period, production of Bharat Coking Coal Ltd was up 21.7%, South-Eastern Coalfields was up 22.3%, Eastern Coalfields up 17.5%, Western Coalfields up 18.2% and Central Coalfields up 9.7%.
Coal India Ltd mined a total of 175.5 million tonne (MT) of coal during the first quarter of fiscal 2023-24, registering a growth of nearly 10% as compared to the same period last year. This was the highest ever production for the company recorded during the first quarter of any year.
The company’s production in the month of June rose 12.4% to 58 MT from 51.6 MT, YoY. Read here
Coal India share price falls over 1% ahead of the announcement of Q1 results today. Coal India shares were trading 1.03% lower at ₹230.45 apiece on the BSE.
Management guidance on Q2FY24 and FY24 production guidance are important indicators to look out for. Commentary on the recent FSA price hike, management guidance on coal availability for e-auction and commentary on e-auction premium are key monitorables. Any further revision in FSA prices and wage revision are important indicators to look out for, Motilal Oswal said.
Coal India’s net sales to remain flattish YoY at ₹352 billion led by modest growth in dispatches (187MT) being offset by decline in coal price realizations. Earnings to be impacted on account of correction in coal prices impacting e-auction premiums marginally offset by hike in FSA rates. The sequential increase in earnings is seen on account of one time wage revision impact in the previous quarter, JM Financial said.
Coal India’s e-auction volume is expected to rise to 21 mnte, though e-auction premium is likely to trend lower to 105% of FSA price, as per ICICI Securities.
We have factored in additional wage-related provision of ₹8.5 billion. Expect EBITDA decline YoY mainly due to higher wage cost and lower e-auction premium, ICICI Securities said.
Coal India’s Q1 operating profit, or Earnings before interest, taxes, depreciation and amortization (EBITDA), is expected to decline year-on-year (YoY) mainly due to higher wage cost and lower e-auction premium.
Coal India’s Q1FY24 EBITDA is estimated to fall 32% to ₹8,326 crore from ₹12,250.8 crore in the year-ago quarter. EBITDA margin may contract significantly to 24.03% from 34.91%, YoY.
Coal India share price traded marginally higher on Tuesday ahead of the announcement of Q1 results today. Coal India shares were trading 0.88% higher at ₹234.90 apiece on the BSE, after opening at ₹232.55 apiece against the previous close of ₹232.85 apiece.
Coal India’s revenue is likely to fall 1.27% to ₹34,645 crore in the quarter ended June 2023 as compared to ₹35,092.2 crore in the corresponding quarter of last fiscal.
On a sequential basis, Coal India Q1 revenue may fall 9.19% from ₹38,152.3 crore in the March quarter, according to average analysts' estimates.
Coal India’s net profit in Q1FY24 is likely to fall 33% to ₹ ₹5,890 crore from ₹8,834.2 crore in the same period last year., as per brokerage poll by Livemint.
Fall in coal prices, lower e-auction premiums and higher wage costs are likely to impact earnings of the mining major.
Coal India, the world’s largest coal producer, will announce its Q1 results today. Coal India Q1 results are likely to remain weak, impacted by correction in coal prices, lower e-auction premiums and higher wage cost.
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