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...