World's largest coal miner today posted a strong set of earnings. Coal India's net profit rose to Rs 4,395 crore, beating street estimates. S Narsing Rao, Chairman of Coal India says the PSU may miss its FY13 production target of 464 million tonnes (MT).
S Narsing Rao, Chairman of Coal India says the PSU may miss its FY13 production target of 464 million tonnes (MT).
World's largest coal miner today posted a strong set of earnings. Coal India's net profit rose to Rs 4,395 crore, beating street estimates. Its net sales surged to Rs 17,325 crore, better-than-expectation of Rs 16,800 crore. Strong sales volumes and lower-than-expected rise in costs helped Coal India's earnings during the quarter.
Coal production of the company went up to 117.37 million tonne (MT) from 114.62 MT, while offtake jumped to 120.45 MT from 110.27 MT year-on-year. In the last fiscal, CIL produced 435.84 MT coal, missing the revised production target of 447 MT.
Below is the verbatim transcript of his interview on CNBC-TV18
Q: Take us through your top-line? It did come ahead of street's estimates. I think on the back of better-than-expected sales volumes?
A: Yes, because we did expect 120 million tonnes sales during the month. So, I guess it is as per expectation.
Q: The worrying part would be that your e-Auction volumes have dipped as a percentage of the total sales volumes. This is the first time that we are seeing a sub 10 percent to the total sales. If you just take in your e-Auction volumes at around 10.48 odd, take us through that one?
A: e-Auction both volume and price, is a function of coal availability and demand. When we have supplied say about 25 million tones of coal more into the economy, during the period, obviously it has some impact on the both demand and the price.
Secondly, the international prices also have softened during the period. Therefore a combination of both our better performance and international prices resulted in where we are.
Q: Going ahead for keeping in mind March 2013 you all normally do around 50-55 odd million tonnes from the e-auction space. So, this time around how is it looking? I think you all are at around 35 million tonnes odd at the end of nine months?
A: Yes at the end of nine months it was 34.24 million tonnes,.
Q: So, what is the target for 2013?
A: I expect it to be about 46 million tonnes.
Q: So, that would be lower on year to year basis?
A: Yes, 6 million tonne lower than last year.
Q: Take us through your production numbers? In this quarter you have delivered good set of production numbers. For FY13 per se, is that target of 464 million tonne on line because you will have to do about 155 million tonne odd in this quarter itself? Is that on stream?
A: We are on, but looking a bit tough. We should be ending closer to that.
Q: Could you give us a figure; will it be sub 460 million tonne because that would be a clear disappointment?
A: Not really, from both investors and consumers point of view because ultimately we could liquidate as on today 23-24 million tones of coal given the fact that there is about 47 million tonnes of coal still available on the ground stock. I am not unduly worried about the production side.
Q: Your numbers on the whole look pretty good, but unfortunately your margins have taken a hit, so it has come in sub-25 percent odd what exactly is playing out – the diesel price hike, the employee cost, what else?
A: There is a general price that is all your spare parts etc. that I cannot quantify, but surely there has been increase in the diesel. There has been no wage revision, but annual increase of 15-16 percent is a natural increase; increments and also the consumer price index based daily allowance (DA) neutralisation etc. which generally it is in the range of about 15 percent per annum.
Q: The price increase, when could we see it coming about for Coal India considering that your margins are getting hit. So all the investors are looking at when exactly could we see the next price hike because it has been quite some time since we had a Coal India price hike?
A: Right now we are not considering, but surely at appropriate time we will consider the proposal.