Coal India Ltd. share price target

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...

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...

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.

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...

During the YTD current fiscal, CIL's production and offtake volumes witnessed a muted trend. One of the reasons for the same is extended monsoons. Production volume for the first 10 months (April-January 2020) of FY20 were at 451.5 million tonnes (MT) (down 3.9% YoY). Similarly, offtake volumes for April-January 2020 were at 473.3 MT (down 4.8% YoY). Going forward, we maintain our offtake volume assumption of 600 MT for FY20E and 625 MT for FY21E. CIL's offtake volume for FY19 was at 608 MT. EBITDA margins to hover around ~21-22%......

After 3 quarters of muted Rs 4bn revenue runrate, CIL is returning back to growth path. With Govt order book (49% in mix) moving into execution from 4QFY20, CIL will start delivering strong execution. EBIDTA margin expansion of 100-150bps may play out as number of sites is coming down and average order value is going up. Gross debt is stable at Rs 2.8bn though CIL needs to bring down unbilled revenue. We Maintain BUY. Key risks (1) Slowdown in real estate (2) Delay in debtors recovery & (3) Slowdown in Government Capex. Capacite Infraprojects Ltd (CIL) delivered Rev/EBIDTA/PAT beat of (1.2)/9.8/8% respectively. Despite this, headlines numbers remain weak, resulting in 15/3/5% cut to our FY20E Rev/EBIDTA/APAT estimate. We believe 3QFY20 execution has bottomed and recovery is expected from 4QFY20. We maintain BUY on CIL with an increased TP of Rs 360/sh (12.8x FY21E EPS).