Coal India Ltd. share price target

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....

Consolidated revenue during the quarter increased 14.6% QoQ supported by FSA revenue (+9.9% QoQ) with recovery in both sales volume (+5.8% QoQ) and realized prices (+3.9% QoQ). Realization...

months. However, that is largely led by equally weak base. We expect growth to taper off to 7% November onwards due to improved base. In spite of attractive on valuations (EV/EBITDA at 2.5x FY22e), stock would continue to...

YTD, both production, offtake remains broadly flattish YoY In the current fiscal (YTD), Coal India witnessed a flattish trend in both production and offtake volumes. During April-October 2020 (YTD), CIL production volume was at 283 MT (up 1.0% YoY) while offtake volume during the aforesaid period was at 306 MT (marginally down 3% YoY). Going forward, for FY21E and FY22E, we model an offtake volume of 600 MT and 625 MT, respectively. For FY20, production volume was at 602 MT (down 1%...

Q1FY21 revenue from operations drop 31.8% YoY to Rs. 17,007cr, owing to lower demand from power sector, as commercial establishments such as offices and factories largely remained shut during the quarter owing to lockdown. FSA revenues of raw coal went down 22.2% YoY at Rs. 13,896cr as sales volume registered a 21.6% YoY decline to 102.2mt. However, average FSA realizations decreased marginally to Rs. 1,360/ton (-0.8% YoY). Similarly, E-Auction revenue of raw coal took a hit reaching Rs. 2,535cr (38.2% YoY) due to lower sales volume of 15.87mt (-16.7% YoY) and lower average realization of 1,598/ton. The washed coking coal revenue fell 47% YoY to Rs. 177cr during the quarter, due to lower sale volume of 0.3mt (-35.4% YoY) and decrease in...

Receivables fell 10% in August'20 v/s June'20 to Rs210bn Coal India (COAL) reported Q1FY21 EBITDA in line with our expectation. In spite of attractive valuations (EV/EBITDA at 2.5x FY22e), stock would continue to remain under pressure due to frequent stake sale by Govt and pressure on profitability in E-auction (contributes>50% of EBITDA) in light of weak global prices and sluggish demand. Release of additional supplies due...