For 2QFY2016, Coal India (CIL) reported a strong 8% yoy increase in revenue to Rs16,958cr, in line with our estimate of Rs16,833cr. Off-take volumes were marginally ahead of our expectations at 121.8MT (our estimate was of 119.1MT). Off-take was higher in the FSA segment with e-auction and washeries volumes in line with expectations. FSA realizations were in line with expectations at Rs1,294/T. However, e-auction realizations came in much lower than expected at Rs1,788. Blended realization/tonne came in lower than our expectation at Rs1,392 (1.5% lower than our estimate of Rs1,414), led by the sharply lower e-auction realisation. Blended realisation declined 2% yoy, while off-take increased 10.2% yoy, resulting in an 8.2% increase in net sales. The EBITDA, at Rs3,008cr, came in 3.2% lower than our estimate, resulting in a 140bp improvement in EBITDA margin to 17.2%, marginally lower than our estimate of 17.9%. Net profit at Rs2,544cr was slightly ahead of our estimate of Rs2,445cr. Outlook and valuation We reduce our consolidated FY2016 and FY2017 EPS estimates by 12% and 9%, respectively, in view of the lower than expected realizations and increased operating expenses. We expect CILs production to increase by 7.1% to 530MT in FY2016 (538MT earlier) and 572MT...