Coal India Ltd. share price target

In-line Performance; Earnings Likely to Witness Sharp Improvement Consolidated reported PAT of Coal India (CIL) increased by 61% YoY to Rs37.8bn while net revenue grew by 26.6% YoY to Rs242.6bn owing to higher FSA realisation (+9.3% YoY to Rs1,313/tonne) led by improved e-auction realisation (+51% YoY to Rs2,399/tonne), healthy volume growth (+10.9% YoY to 153.4mt) and price hike benefit. Looking ahead, we expect CIL's profitability to witness sharp improvement backed by price hike benefit, while all operational negatives have already been factored in. Further, its RoE is expected to improve on the back of higher realisation, improved margin and optimum utilisation of assets. We maintain our BUY recommendation...

11.7% to 153.47 MT. CIL's average realizations improved 2.1% to Rs 1472 per tonne. Other income growth was flat at Rs 1,209.99 crore, thus, the PBIDT inclined 47% to Rs 6,942.45 crore. The Company interest cost fell 9% to Rs 110.34 crore, while depreciation cost grew 11%...

Consolidated net sales of Coal India (CIL) grew by 15.3% YoY to Rs269bn owing to higher FSA realisation (+2% YoY to Rs1,403/tonne), by improved e-auction realisation (+31% YoY to Rs2,112/ tonne) and healthy volume growth (+5% YoY to 159.6mt) coupled with price hike benefit. However, its reported PAT declined by 52.4% YoY to Rs12.9bn, which adjusted for gratuity (net of tax) zoomed by 137% YoY to Rs64bn. Looking ahead, we expect CIL's profitability to witness sharp improvement backed by price hike benefit, while all operational negatives have already been factored in. Further, its RoE are expected to improve on the back of higher realisation, improved margin and optimum utilisation of assets. We maintain our BUY recommendation on the...

We re-instate our coverage on Coal India (CIL) and rate it Buy with a new TP of Rs375. We are enthused by the progress made by CIL in last six months in successfully tackling multiple headwinds around employee wage costs and FSA realisations and we expect CIL to deliver strong earnings growth over FY18-20E led by i) better demand and volume CAGR of 6%, ii) robust FSA pricing on the back of recent price increases and better grade compliance and iii) strong share of eauction volumes at 18% of total volumes coupled with higher realisations supported by favorable global coal prices. Stock trades at inexpensive valuations of 6x FY19E EV/EBITDA despite attractive return rations and we expect strong case...

The operating margin (OPM) shrank to 0.7% from 14.9% corresponding previous quarter due to spike in Employee benefit expenses. Employee benefit expense for the quarter jumped to Rs 16,653.86 crore from Rs 9,240.67 crore in the year ago-quarter. As a %age of sales and net of stock adjustments, employee benefits cost rose to 58.9% from 37% corresponding previous quarter. Thus, OP dropped by 94% to Rs 195.50 crore. Other income was up 12% to Rs 2,000 crore, thus, the PBIDT declined 58% to Rs 2,195.65 crore. The Company interest cost fell 2% to Rs 112.72 crore, while depreciation cost grew 10% to Rs 930.79 crore. Thus, the Profit before Tax (PBT) fell 73% to Rs 1,152.14 crore....

ICICI Securities Ltd | Retail Equity Research Coal India reported sales volumes of 158.86 million tonne (MT) (up ~5% YoY & QoQ). Blended realisation was at | 1580/tonne (up 6.7% YoY, 15.8% QoQ). FSA sales volume came in at 126.4 MT (up 8.7% YoY, 3.7% QoQ). FSA realisation during the quarter was at | 1403/tonne (up 2% YoY, 18.7% QoQ). E-auction volumes came in at 29.3 MT, flattish YoY, up 11% QoQ. E-auction realisations were up 31.1% YoY, 5.7% QoQ to | 2112/tonne. The company reported a total...

We revisited two railway projects that are aimed at improving coal evacuation DK line and GP line in Chhattisgarh after 2-3 years. While the DK line is progressing well, work on the GP line is moving very slowly. Existing evacuation infrastructure can handle planned growth at SECL and MCL for a couple of years but not beyond. The GP and/or JB-HM projects are critical for additional coal dispatches to North and West India....

Coal India (CIL) reported 9.4% production growth and 5.5% offtake growth YoY in Mar'18. Production jumped significantly in Mar'18 vs. the scanty 1-2% growth seen in the previous months of the year. This may have been led by a) offloading of built up stocks completed by Jan-Feb18 and b) low power plant coal stock (still at 10 days) building up on coal demand. Offtake growth remains strong at 5.5%, due to higher coal...

The stock looks fairly valued at 6.7xFY19E and 6.1xFY20E EV/EBITDA. Hence, we recommend HOLD' rating on the stock with a target price of Rs. 296 (based on 6x FY20E EV/EBITDA). Higher offtake spurs revenue growth Consolidated revenue increased by ~6% YoY in Q3FY18 largely driven by 6.6% growth in volumes. While FSA (Fuel supply agreement) volumes, accounts for 80% of overall offtake, rose 8% to 122MT, e-auction volumes increased by 4.7% YoY to 26.4MT. On the realization front, FSA realisation declined by 8.3% YoY Rs....

Operating Margin Continues to Improve; Marginal Rise in Reported PAT e-auction coal prices and lower operating cost. Despite 18% YoY surge in EBITDA to Rs46bn, reported net profit grew by just 4.2% YoY to Rs3.0bn owing to 21% YoY decline in other income to Note: * CMP as on February 23, 2018 Rs8.4bn led by lower interest, lower dividend income from subsidiaries and higher effective tax rate of 34%. While EBITDA/tonne rose by 12% YoY to Rs303, FSA realisation slipped by 8% YoY to...