Result date: 10th August, 2022
Recommendation: Buy
Target price: Rs251
Source: IIFL Research
Coal India is likely to post strong show in the June 2022 quarter. It reported production and sales volume growth of 29% and 11%, respectively over the year-ago quarter. Sequentially, coal dispatches were down 1.9%. Average realization is likely to have grown ~12% over the year-ago quarter, aided by higher e-auction premiums and absence of discounts given during the base quarter due to the pandemic. Sequentially, this metric could have fallen 2% given a higher base of the March 2022 quarter. Consequently, revenue is likely to grow ~25% over the year-ago quarter and decline ~4% sequentially.
Improving realization, rising share of e-auctions in EBITDA (from 18% a year-ago to ~43%) and better cost control could aid Coal India’s profitability in the June 2022 quarter. Sequentially, though EBITDA could decline amid falling realizations.
Profit After Tax (PAT) could swell 108.6% over the year-ago quarter, toeing the performance of EBITDA.
Important management insights to watch out for:
Rs. Billion | June 2022 estimates | YoY change | QoQ change |
Revenue | 315 | 24.7% | (3.7)% |
EBITDA | 99 | 110.5% | (7.8)% |
Profit After Tax | 66 | 108.6% | (1.3)% |
Source: Brokerage reports
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