Q1FY23 Preview: Coal India: Revenue seen at Rs315 billion, PAT at Rs66 billion

9 Aug 2022 , 08:56 AM

Result date: 10^th 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:

• Update on diversification projects and investments
• Guidance on capex, JV investment, and e-auction volumes

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