Expected rise in power demand and improving volumes along with effective control over costs could drive the company's performance in near-term. We reiterate our BUY rating on the stock with a rolled forward target price of Rs. 155 based on 4x FY23E EV/EBITDA. Topline records sequential improvement Coal India's revenue grew by 11.4% QoQ to Rs. 21,708cr (+0.7% YoY) primarily aided by increased volumes on the back of strong demand in Q3FY21. FSA revenue posted a 9.2% QoQ increase to Rs. 16,675cr (-7.4% YoY) due to increase in volumes (+13.9%...

In the current fiscal (YTD), Coal India witnessed a flattish trend in both production and offtake volumes. During the 10 months period between April 2020 and January 2021 (YTD), production volume was at 453 MT (up 0.4% YoY) while offtake volume during the aforesaid period was at 463 MT (marginally down 2% YoY). Going forward, for FY21E, FY22E and FY23E, we...

Coal India (CIL) has posted 21% drop in consolidated net profit at Rs 3,084.10 crore despite 2% growth in total income to Rs 23,686.03 crore for third quarter ended December 2020, chiefly due to sales volume growth partially offset by drop in realization. The operating margin (OPM) rose 40 bps to 21.8%. Thus, Operating Profit (OP) grew 4% to Rs 5,164.78 crore. Performance for quarter ended December 2020...

Coal India reported EBITDA (adj. for non-cash stripping activity adj) below volumes on a reasonable base. The benefit of rise in spot prices would be limited in E-auction realisations due to high share of auctions to under stress power sector. Given the ESG related issues, volatile performance operational performance and overhang on stock supply through OFS/ETF, we maintain...

Coal India (COAL)'s dispatches reported an 8% YoY increase at 51.3mt for November. This marked the fourth straight month of YoY growth highlighted by continued recovery in power demand. As per initial data from POSOCO, India's power demand / coal-based generation has risen 3.5%/5.2% YoY. YTDFY21, Coal India's off-take is now down just ~2% YoY (1HFY21: -8% YoY). With continued recovery in power demand, we conservatively raise our FY21 off-take estimates to 580mt (flat YoY) v/s 565mt earlier (-3% YoY). Our estimates imply ~2% YoY off-take growth for the remainder of FY21....

Consolidated revenue during the quarter increased 14.6% QoQ supported by FSA revenue (+9.9% QoQ) with recovery in both sales volume (+5.8% QoQ) and realized prices (+3.9% QoQ). Realization...

months. However, that is largely led by equally weak base. We expect growth to taper off to 7% November onwards due to improved base. In spite of attractive on valuations (EV/EBITDA at 2.5x FY22e), stock would continue to...

YTD, both production, offtake remains broadly flattish YoY In the current fiscal (YTD), Coal India witnessed a flattish trend in both production and offtake volumes. During April-October 2020 (YTD), CIL production volume was at 283 MT (up 1.0% YoY) while offtake volume during the aforesaid period was at 306 MT (marginally down 3% YoY). Going forward, for FY21E and FY22E, we model an offtake volume of 600 MT and 625 MT, respectively. For FY20, production volume was at 602 MT (down 1%...

We rate CIL as a BUY with a TP of Rs 540 (SOTP). Looking at its history, Cummins India Ltd (CIL) seems like a passable investment opportunity, on the back of RoE contractions (resulted in multiple de-rating over last few years), export underperformance (limited rerating), and CG perception on sister concerns manufacturing in India. But the past is not always a cue to what the future holds. At CILs heart lies the core technology engine, as the regulatory norms on CEV BSIV/CPCB IV+ will give it a distinct competitive advantage. And despite concerns of newer technology induction through CTIL, domestic distribution will be mainly through CIL. Some of the newer technologies like alternate fuels, telematics, and electric engines will support valuation rerating both due to (1) competitive advantage, margin/RoE expansion and (2) gaining traction in export markets.

Q1FY21 revenue from operations drop 31.8% YoY to Rs. 17,007cr, owing to lower demand from power sector, as commercial establishments such as offices and factories largely remained shut during the quarter owing to lockdown. FSA revenues of raw coal went down 22.2% YoY at Rs. 13,896cr as sales volume registered a 21.6% YoY decline to 102.2mt. However, average FSA realizations decreased marginally to Rs. 1,360/ton (-0.8% YoY). Similarly, E-Auction revenue of raw coal took a hit reaching Rs. 2,535cr (38.2% YoY) due to lower sales volume of 15.87mt (-16.7% YoY) and lower average realization of 1,598/ton. The washed coking coal revenue fell 47% YoY to Rs. 177cr during the quarter, due to lower sale volume of 0.3mt (-35.4% YoY) and decrease in...

Receivables fell 10% in August'20 v/s June'20 to Rs210bn Coal India (COAL) reported Q1FY21 EBITDA in line with our expectation. In spite of attractive valuations (EV/EBITDA at 2.5x FY22e), stock would continue to remain under pressure due to frequent stake sale by Govt and pressure on profitability in E-auction (contributes>50% of EBITDA) in light of weak global prices and sluggish demand. Release of additional supplies due...

YTD, both production, offtake remain lower YoY In the current fiscal (YTD), the company witnessed a muted trend in both production and offtake volumes. During April-August 2020 (YTD), CIL reported production of 195.5 MT (down 7.0% YoY) while offtake during the period was at 208.4 MT (down 13.4% YoY). During the current fiscal, August 2020 is the only month where the company was able to report growth in production and offtake on a YoY basis. For August 2020, CIL's coal production increased 7.1% YoY to 37.2 MT (34.7 MT in August 2019) while...

5 September 2020 Coal Indias (COAL) 1QFY21 results highlight the impact of lower volumes/ e-auction realizations amid subdued thermal power demand. Adj. EBITDA (ex-OBR) was down 63% YoY. Muted power demand has impacted off-take and e-auction realizations. However, we expect Coal India to tide over the situation given its large cash INR190/share based on 3.5x Sep21 EV/EBITDA. 1QFY21 Adj. EBITDA (ex-OBR) was down 63% YoY to INR28b (in-line) on account of lower off-take/e-auction realizations. While FSA realization at INR1,359/t was below our est. INR1,400/t, it was offset by higher mix of e- auction volumes at 15.9mt (v/s est. Revenue declined 26% YoY to ~INR185b (v/s est.

During Q4FY20, The company has reported Consolidated total income to Rs.27,568.23 crore. Down by 3.56 % as compared to Q4FY19. Profit before tax (PBT) in Q4 FY20 stood at Rs 7447.40 crore, down by 16.2% from Rs 8892.35 crore in Q4 FY19. Tax expense fell 1.54% to Rs...

29 June 2020 Coal India (COAL)s results highlight the impact of lower e-auction realizations and flattish volumes amid subdued thermal power demand. FSA realizations, though, have continued the improvement demonstrated over the past year on account of better grade quality. Muted power demand would impact off-take and e-auction realizations in the near term. However, we expect Coal India to tide over the situation price of INR189/sh based on 3.5x Sep21 EV/EBITDA. ~INR66b) due to lower e-auction realizations and muted power off-take. The beat on our estimates was driven by better-than-expected FSA realizations and a higher mix of e-auctions in the off-take. Volumes were flat YoY at ~164mt (in-line). Cash cost (ex-OBR) decreased 1% YoY at INR981/t. FSA volumes declined 2% YoY to 139.2mt. Realizations came in higher grade realization. E-Auction volumes rose 26% YoY to 21mt. Conversely, realizations were down 24% YoY to INR2,105/t.

Coal India (CIL) reported a mixed set of Q4FY20 numbers. EBITDA came in higher than our estimate while reported PAT came in lower than our estimate. PAT came in lower than our estimate on the back of higher-thanexpected effective tax rate. CIL reported sales volumes of 164 million tonne (MT), flattish YoY. Fuel supply agreement (FSA) sales volume was at 139.2 MT (142.4 MT in Q4FY19) while FSA realisation during the quarter was at | 1446/tonne (| 1460/tonne in Q4FY19). E-auction volumes were at 21.0 MT (16.7 MT in Q4FY19) while e-auction realisations were at | 2106/tonne (| 2754/tonne in Q4FY19). Total operating income was at | 27568.2 crore...

28 May 2020 COAL has reduced production given the build-up in inventories at its own mines and power plants. Dispatches for COAL have increased over the past one week, even as power demand recovers and factories restart operations. As demand continues to recover and given the current focus on OBR, the company believes it would be in a better position to ramp up production. Of the ~170-180mt imported thermal coal in India, COAL plans to substitute ~100mt, thereby looking to improve off-take. ~18mt of coal has been auctioned and committed for off-take (as part of its import substitution drive). COAL has noted that it expects thermal power demand to continue at least for the next 10-15 years in the country. Accordingly, it plans to increase production to 1b ton over the next 3-5 years. While COAL is still finalizing its investment plan, it has set FY21 capex target at INR120b, which might increase in the coming years.

2 April 2020 Coal Indias (COAL) dispatches declined 10.3% YoY to 53.5mt in Mar20 due to a sharp fall in demand from the power sector. Indias nation-wide lockdown comes at a time when (a) power demand has mines has been ramped up following a heavy monsoon season. Accordingly, inventories at both coal mines and power plants have risen (refer to Exhibits 1/2) a general trend at the onset of summer, but higher than usual. On the other hand, with Industrial and Commercial consumers accounting for nearly ~50% of Indias power demand, generation has been severely dented over the past one week. Furthermore, given the must-run status for renewables in the country, the brunt of the demand decline is being borne by coal-based plants. Generation from coal-based plants fell ~40% YoY over March 25 (Exhibit 4). On account of such a sharp demand drop and higher coal inventories at power +6.5% YoY) (Exhibit 5).

At current level, the company is attractively trading at ~2.6x FY22 EV/EBITDA and 5.3x FY22 P/E. We reiterate our BUY rating with a roll forward target price of Rs. 202 based on 3.5x FY22E EV/EBITDA. FSA sales volume boosts topline QoQ Coal India's Q3FY20 revenue grew 13.8% QoQ to Rs. 23,190cr (-7.4% YoY), primarily driven by higher revenue from FSA and other operating income, which increased 20.6% QoQ and 16.3% QoQ, respectively. E-Auction's revenue declined 17.5% QoQ (38.1% YoY) due to lower sale volume of 9.8mt (-36.5% QoQ; -32.8% YoY), partially offset by higher average realization at Rs. 2,623/t (+29.9% QoQ; -7.9% YoY). FSA's...

Coal India Ltd is the largest coal producing company in the world. The company also produces non-coking coal and coking coal of various grades for diverse applications. The company's customer include large thermal power generation companies, steel and cement producers and other industrial companies in the public and private sector with many...