Angel Broking has maintained neutral rating on Coal India, in its February 15, 2012 research report.
Angel Broking has maintained neutral rating on Coal India , in its February 15, 2012 research report.
“Coal India’s (CIL) 3QFY2012 top-line was below our expectations; however, bottom-line beat our estimates on account of lower-than-expected staff cost and higher-than-expected other income. We maintain our Neutral view on the stock.”
“CIL’s 3QFY2012 net sales increased by 21.0% yoy to Rs15,349cr (below our estimate of Rs17,664cr) primarily due to higher average realization. Blended average realization on coal sales increased by 21.2% yoy to Rs1,392/tonne; however, offtake stood flat yoy at 110mn tonnes. Production grew by 1.4% yoy to 115mn tonnes. CIL’s EBITDA per tonne increased by 40.9% yoy to Rs442 in 3QFY2012 on account of higher realization. The company’s EBITDA increased by 40.6% yoy to Rs4,875cr, representing an EBITDA margin of 31.8%. Other income grew by 48.4% yoy to Rs1,856cr on account of higher cash balance and increased treasury yield. Hence, adjusted net income grew by 53.5% yoy to Rs4,043cr (above our estimate of Rs3,650cr).”
“CIL’s 9MFY2012 production stood at 291mn tonnes; hence, it is unlikely to meet its FY2012 production target of 440mn tonnes in our view. Further, we believe that infrastructural bottlenecks (mainly availability of railway rakes) are likely to result in only 2.5% and 4.9% yoy growth in sales volumes during FY2012 and FY2013, respectively. Moreover, higher staff costs are expected to hit CIL’s operating margins during FY2013. Hence, we maintain Neutral rating on the stock,” says Angel Broking research report.
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