Coal India Ltd. share price target

Despite a steep increase in cost on account of the wage hike, we expect adjusted EBITDA CAGR of 15 % to INR197b over FY17-19. Growth in EBITDA is driven by annual volume growth of 7 %, operating leverage and other operating income. EPS is expected to increase at a CAGR of 18 % to INR20.7/share over FY17-19.At 90 % payout, the dividend yield will be 6 % at CMP. Concerns around grade slippage, e-auction price decline, deceleration in volume growth and wage hikes are now behind. Volume growth is accelerating,which will also drive operating leverage gains. Various cost initiatives like closing of underground mines, VRS and overtime compensation can drive upside to our estimates. The stock trades attractive at 6.8x FY19E EV/EBITDA. The TP is INR335/share.based on 8x FY19E EV/EBITDA. Buy.

Off-take & Realisation to Improve on Likely Demand Revival In line with our estimate, consolidated net sales of Coal India (CIL) rose by 4.2% YoY to Rs181bn in 2QFY18 driven by higher coal off-take (+13.6% YoY), which was off-set by 8.2% YoY fall in average realisation. Despite 56.7% YoY surge in EBITDA to Rs12.3bn led by higher volume, higher e-auction prices and lower operating cost, its PAT fell by 39.8% YoY to Rs3.6bn. Looking ahead, we expect CIL's RoE & RoCE would improve on the back of higher realisation, improvement in margins and optimum utilisation of assets. Expecting meaningful revival in demand, we...

Coal India Ltd Q2FY18 results comment Revenue fell by 5.03% to Rs. 17478.52 Cr in Q2FY18 when compared to the previous quarter. On the other hand, it increased by 11.92% when compared with Q2FY17.

ICICI Securities Ltd | Retail Equity Research Coal India reported a mixed set of Q2FY18 numbers wherein the topline came in line with our estimate while reported EBITDA, PAT came in below our estimate. Reported EBITDA, PAT came in below our estimate on the back of higher-than-expected employee cost provision and lower-than-expected other income Coal India reported sales volume of 131.6 million tonne (MT) (up 14% YoY) while blended realisation was at | 1331/tonne (flattish QoQ). FSA...

Maintain BUY with a TP of Rs 305 (7.5x Sep-19 EV/EBITDA). Coal Indias (CIL) 2QFY18 results were below estimates (EBITDA at Rs 6.19bn vs est 14.65bn, 2x/(77.7% YoY/QoQ). The miss was mainly driven by higher employee expenses (Rs 91.55bn, 8.9/13.4x YoY/QoQ), which also included a provision of Rs 23bn towards wage settlement, finalized in October 2017. Contractual expense, the other key cost head, was sharply lower (Rs25.52bn, 7.9/(17.6)% YoY/QoQ). This might indicate lower pre-stripping and is likely a one-off.

than-expected uptick in e-auction realization* (INR1,614 v/s estimate of INR1,700) and reversals* pertaining to 1Q in washed coal (INR2,582 v/s estimate of INR3,200). FSA realization declined 5% YoY to INR1,224 (in line). EBITDA (ex-OBR) increased 46% YoY to INR12.9b, albeit off a low base. The reported numbers were also impacted by employee wage negotiation provision (~INR23b). The provision is ad-hoc pending final implementation of the negotiation agreement. There was also de-stocking of some high cost inventories, driving increase in reported expenses....

Domestic coal production rose 10.6% YoY to 47.5mt, while dispatches are estimated to have increased 14.9% YoY to 52.3mt in September 2017. Imports were down 7.7% YoY to 10.3mt in September, but the rate of decline against the last few months is moderating. We estimate coal demand growth of ~3% YoY to ~66mt in September. Demand...

We now look forward to many upsides. COAL is planning to manage its costs by closing its loss-making underground mines, the contribution of which to overall volumes is insignificant, but losses are meaningful. COAL is also planning to lower operating costs by reducing overtime and VRS. With clarity on the impact of the wage hike, COAL can look forward to a price hike. We are not factoring in any price hike in our models....

Maintain BUY with a TP of Rs 300 (7.0x June 19 EV/EBITDA). Coal Indias (CIL) recent performance has been uninspiring: flat offtake, lowest FSA realisations since 3QFY12 despite prices hikes, and weak e-auction premia. This has weighed on the numbers with LTM EBITDA down 27% and adjusted PAT (ex-OBR provisions) down 25% YoY. Coal offtake should improve hereon, given restocking demand from power plants. Third party sampling for 100% of its dispatches, lower taxation and continued discounts given to landed parity prices should ensure bottoming out of realisations.

Muted Quarterly Performance; Maintain BUY on Improved Outlook In line with our estimate, Coal India (CIL) has delivered a muted performance in 1QFY18 with its net profit declining by 23.3% YoY to Rs23.5bn. Further, its EBITDA fell by 17.8% YoY to Rs35.2bn primarily due to higher provisioning towards pending wage negotiations and weak Fuel Supply Agreement (FSA) realisations due to grade slippages. On a positive note, its consolidated revenue increased by 4.3% YoY to Rs205bn driven by 3.1% YoY rise in coal off-take, while average realisation remained flat on YoY comparison. Looking ahead, we expect CIL's RoE & RoCE to improve on the back of higher realisation, improvement in margins and...