Skip to content

    Coal India

    COALINDIAGood
    Oil, Gas & Consumable Fuels·19 Feb 2024
    Management Summary

    Coal India delivered a strong Q3 FY24 with highest-ever 9-month production of 531.90 MT, growing 11% YoY. Revenue crossed Rs.1 lakh crore for first 9 months. E-auction premiums spiked above 100% in Q3 due to low power plant stocks in September and record peak power demand of 240 GW, but moderated to 36-48% in January-February. Management remains confident of achieving near 780 MT production for FY24, with FY25 target set at 838 MT.

    Highlights

    8

    • Highest ever 9-month coal production of 531.90 MT with 11% growth; overburden up 22%

    • Highest ever 9-month PBT of Rs.31,937 crores (+5% YoY) and PAT of Rs.23,849 crores

    • Highest ever 9-month revenue from operations of Rs.1,04,914 crores (+5% YoY)

    • E-auction premium exceeded 100% in Q3; moderated to 36-48% range in Jan-Feb 2024

    • Production target of 780 MT for FY24; 5 of 7 subsidiaries ahead of target, SECL lagging by 8-9 MT

    • FY25 production target revised to 838 MT (from 850 MT) due to high stocks at power plants

    • Second interim dividend of Rs.5.25/share; total FY24 interim dividend of Rs.20.50/share (205% of face value)

    • Capex of Rs.5,702 crores in Q3; on track for Rs.16,500 crores for FY24

    What Changed4

    vs Q4 FY25

    Tone shiftCautiously optimistic on growth, defensive on market share concerns → GoodGuidance items6 → 5 (-1)Risks discussed6 → 4 (-2)Q&A highlights5 → 3 (-2)
    Key financials

    Metrics

    7

    Periods

    3

    Headline

    1
    • Market Capitalization (31 Dec)
      ₹2.32L Cr

    9M

    5
    • Revenue from Operations
      ₹1.05L Cr
      YoY+5%
    • PBT
      ₹31,937 Cr
      YoY+5%
    • PAT
      ₹23,849 Cr
    • Coal Production
      531.9 MT
      YoY+11%
    • Overburden Removal
      1,404.85 Mn
      YoY+22%

    FY24

    1
    • Capex Target
      ₹16,500 Cr

    Segment breakdown

    Power Sector
    454.03 Mn 9M Power Dispatches610 Mn FY24 Power Requirement
    E-auction
    80% FY24 Average Premium (9M)42% Jan-Feb 2024 Premium
    List

    Guidance & targets

    5
    CategoryTargetPriority
    Production
    FY24 Production Target
    780 million tonnes
    		High
    Production
    FY25 Production Target
    838 million tonnes
    		Medium
    E-auction
    H2 E-auction volume as % of production
    15%
    		High
    Capex
    FY25 Capex
    Rs.17,500 crores
    		High
    Employee Cost
    FY24 Employee Cost
    Less than last year by ~Rs.2,000 crores
    		High

    Risks & concerns

    5
    RiskSeverity

    E-auction premiums moderating sharply from Q3 highs above 100% to 36-48% range

    Q3 spike driven by record 240 GW peak demand and low power plant stocks; management expects 40-50% to be the new normal — Both acknowledged

    medium

    SECL production lagging target by 8-9 MT due to land issues at mega projects

    SECL target 197 MT vs actual tracking at ~10 MT shortfall; other subsidiaries trying to compensate — Management acknowledged

    medium

    Receivables jumped from Rs.13,000 to Rs.17,000 crores

    Management in constant pursuit with NTPC, DVC, WPDCL, Mahagenco; expects range to stabilize — Analyst acknowledged

    medium

    FY25 production target reduced from 850 to 838 MT due to high coal stocks

    Stock buildup at power plants above 38 MT and at CIL side creating temporary oversupply — Management acknowledged

    low

    Areas of Evasion(1)

    • Exact capex breakdown between coal and non-coal not immediately available

    Q&A highlights

    3

    “e-auction premiums have started now actually getting away from the linkage with the imported coal prices...40% to 50% is going to be the order of the day”

    Clarifies that domestic coal availability is decoupling e-auction premiums from international prices, signaling structural moderation

    asked by Venkatesh Subramanian

    1 min read4 chapters

    Detailed Narrative

    01

    Record 9-Month Performance

    CIL achieved highest-ever 9-month production of 531.90 MT with 11% growth, backed by 22% overburden removal growth. Revenue from operations crossed Rs.1 lakh crore mark at Rs.1,04,914 crores. PBT stood at Rs.31,937 crores, up Rs.1,579 crores YoY. Five subsidiaries are ahead of targets with only SECL lagging due to land issues at mega projects.

    02

    E-auction Premium Normalization

    Q3 FY24 saw e-auction premiums spike above 100% driven by power plant stocks falling to bare minimum of 90 MT in September and peak demand hitting 240 GW. However, premiums moderated sharply to 36-48% in January-February 2024. Management attributed the normalization to increased domestic coal availability decoupling from international prices, expecting 40-50% to be the new normal.

    03

    Production and Evacuation Infrastructure

    FY24 production target of 780 MT is largely on track with potential minor shortfall of ~10 MT at SECL. FY25 target revised down to 838 MT from 850 MT due to high coal stocks. Chairman confirmed evacuation infrastructure is being enhanced with Tori-Shivpur third line, Jharsuguda-Barpali commissioning, and continued FMC project rollout with Rs.24,700 crores investment over 5 years.

    04

    Coking Coal and Diversification

    Washed coking coal production target of 8 MT by FY30, with current levels at 1.5-2 MT. New washeries at Madhuband (commissioned), Bhojudih (by July), and 10 MT non-coking coal washery at Lakhanpur commissioned. Solar target of 3,000 MW with 250 MW to be operational by FY24 year-end. Critical mineral exploration in 3 blocks with Australia due diligence underway.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.