Coal India Ltd. share price target

We expect the ongoing supply shortage in the global coal market will continue to benefit CIL by making it favorable choice for consumers and helping gain more market share, profitability is expected to improve further in coming quarters driven by strong e-auction premiums. We...

steep rise in global prices, significant increase in costs and a long gap of almost four years since last increase. On the balancing side, strong pick-up in E-auction realisations helped to negate the absence of increase in FSA prices partially. Underpinned by improved operational performance and better outlook on both FSA and E-auction prices, we maintain Accumulate...

For Q3FY22, CIL's consolidated revenue from operations were at | 28434 crore (up 20% YoY & 22% QoQ), higher than our estimate of | 27765 crore. CIL's consolidated EBITDA for the quarter was at | 6825 crore (up 32% YoY & 73% QoQ), higher than our estimate of | 6090 crore. Consolidated EBITDA margin for Q2FY22 was at 24.0% compared to 21.8% in Q3FY21 and 16.9% in Q2FY22 (our estimate of 21.9%). EBITDA/tonne for Q3FY22 was at | 393/tonne, higher than our estimate of | 350/tonne (EBITDA/tonne of...

We expect profitability to recover further in 4QFY22, led by strong e-auction premiums, which breached the 100% mark after 12 quarters in Jan-Feb'21. We raise our FY22E/FY23E adjusted EBITDA by 4%/15%, led by higher eauction premium and increase our TP to INR217 (from INR200 earlier), valuing COAL at 4x FY23E EV/EBITDA. The company is a key beneficiary of...

PBIDT rose 28.64% to Rs 7478.33 crore. Provision for interest fell 15.31% to Rs 131.61 crore. PBDT rose 29.85% to Rs 7346.72 crore. Provision for depreciation rose 13.69% to Rs 1041.32 crore. Profit before tax grew 32.97% to Rs 6,305.40 crore. Provision for tax was expense of Rs...

Coal India’s (CIL) Q3FY22 offtake volumes at 174mnte (up 12.8% YoY) took 9MFY22 volumes to 481.8mnte, up 17.6% YoY (up 15.4% vs 9MFY20), at an all-time high. Key factors behind the surge in offtake volumes were: 1) Higher power demand; 2) low coal stocks at most power plants; 3) unprecedented power prices on exchanges in Oct’21, 4) elevated global coal prices, forcing Indian importers to look for domestic alternatives, 5) RE generation still some way off from becoming a substitute for coal, especially during non-solar hours of the day.

COAL's 2QFY22 e-auction premiums have been disappointing. However, the management highlighted that the current premium is over 50% compared to the 15.3% reported in its 2QFY22 result. It has re-started e-auction to nonregulated sectors, which should result in improved profitability. The management expects the price hike to offset an increase in wages, given the current strong demand environment and high international coal prices. The stock trades at 3.4x/3x FY22E/FY23E EV/EBITDA, with an attractive dividend yield of 11%. We value the stock at 4x FY23E EV/EBITDA with a TP of INR200. We maintain our Buy rating, with a revised TP of INR200/share (from...

During the quarter, FSA realisation, e-auction realisation was lower than our estimate. FSA realisation for Q2FY22 was at | 1382/tonne (down 2% YoY, 1% QoQ), lower than our estimate of | 1425/tonne & e-auction realisations...

On consolidated basis, Quarter ended Sep 2021 compared with Quarter ended Sep 2020. Net sales (including other operating income) of Coal India has increased 10.11% to Rs 23291.08 crore. Operating profit margin has declined from 18.79% to 16.93%, leading to 0.82% decline in operating profit to Rs 3,942.31 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 8.39% to 8.61%. Employee cost decreased from...

COAL India (COAL) delivered marked improvement on three counts in Change in Estimates | Target | Reco from State power generators and strong E-auction revenues were the...

Demand recovery for coal coupled with rising prices should continue to benefit Coal India in the coming quarters. Though reliance on coal usage is expected to decline to 34% by 2040, company expects demand will continue to grow by 31% in absolute terms. Being the market leader in the domestic market and with well-budgeted capacity in place, Coal India is well positioned to tap into this future opportunity. We retain our BUY with a revised TP of Rs. 176 based on 4.5x FY23E EV/EBITDA....

Purchase of finished goods cost rose from Employee cost decreased from 49.79% to 45.05%. contract fell from 18.29% to 17.43%....

Coal India (COAL) reported Q4FY21 earnings in line with our estimates. Adj. EBITDA fell 16% YoY to Rs81.1bn (PLe:Rs81.4bn) due to 5% fall in realisations well as for us. Increase in linkage prices would get diluted in mitigating the elevated capex and upcoming wage hike effective from 1 st July, 2021. Similarly, E-auction realisations remained subdued despite global prices at multi-year highs. Due to low visibility on earnings and deteriorating quality of...

Coal India Ltd.'s quarterly profit rose, missing estimates, amid cost control measures and an increase in other income. State-owned Coal India on Monday reported a marginal 1.1 per cent decline in its consolidated profit at Rs 4,586.78 crore for the quarter ended March 2021 on the back of lower sales. The...

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....