Coal India Ltd. share price target

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...

Coal India Ltd Q3FY18 results comment Revenue increased by 18.48% to Rs. 20708.47 Cr in Q3FY18 when compared to the previous quarter. Also, it rose by 5.3% when compared with Q3FY17.

Other income was down 21% to Rs 840.86 crore, thus, the PBIDT inclined 10% to Rs 5458.71 crore. The Company interest cost fell 12% to Rs 97.44 crore, while depreciation cost grew 7% to Rs 751.06 crore. Thus, the Profit before Tax (PBT) grew 11% to Rs 4610.21 crore. The net Tax Expense for the quarter rose by 26% to Rs 1605.19 crore. The effective tax rate for the quarter increased 420 bps to 34.8%. Thus, PAT before EO and minority interest gained 4% to Rs 3005.02 crore. After accounting loss of Rs 0.23 crore in shares in JV's/associates, Net...

Coal India reported a healthy set of Q3FY18 numbers. The performance was driven by higher e-auction volumes/realisations and lower operating cost. The topline came in line with our estimates while the EBITDA and PAT came in above our estimates The company reported a sales volume of 151.7 million tonne (MT) (up 6.3% YoY, 15.3% QoQ). The FSA volume during the quarter came in at 121.9 MT (up 7.9% YoY, 16.5% YoY). The FSA realisation was at | 1182/tonne (down 8.3% YoY, 3.4% QoQ). The e-auction volume...

Coal India's (COAL) 3QFY18 revenue grew ~6% YoY to INR216b (2% miss) on~7% YoY growth in offtake. FSA realization at INR1,182/t (down 8% YoY / 3%QoQ) missed our estimate of INR1,249/t, which we believe is due to lower dispatches to non-power customers (these fetch a premium). Preference was given to the power sector due to spike in demand. E-auction realization surprised positively, increasing 24% QoQ to INR1,998/t (our estimate:INR1,800/t), which finally reflected the rising price trend for 6-8 months. Adjusted EBITDA (ex-OBR) increased 19% YoY to INR55.4b (in-line) aided by slightly lower cost of production. Though we are keeping overall estimates unchanged, we have increased e- auction prices at the cost of FSA realization, accounting for temporary priority to the power sector

Coal India (CIL) has changed its pricing policy and has rationalized prices across grades, resulting in an average price hike of c. 9%. This is expected to increase revenue by Rs64bn annually (Rs19.5bn for remaining part of FY18). This move will fully offset the adverse impact of wage revision. However, post the price hike, Coal prices (ex-inland transportation cost) are still 50-60% cheaper compared to...

Coal India's offtake volumes posted healthy growth of 7.6% YoY in 9MFY18 (April-December). Offtake volumes during the period were at 421.4 million tonne (MT) vs. 391.5 MT a year ago. Sales volume growth took place amid tepid production growth of 1.7% YoY in 9MFY18. On the back of traction witnessed in coal sales offtake, we maintain our coal sales volume estimate of 580 MT for FY18E and 625 MT for FY19E. We expect e-auction volumes to come in at 100 MT for both FY18E and FY19E....