Coal India aims at 113 MT off-take in Q2; 470 MT in FY13

Coal India today reported results which were slightly above street expectations. The company posted an 8% growth in profits and a 14% growth in sales, which was driven by higher volumes are higher coal prices.

Margins, however, came in slightly lower because of the impact of the wage hike. “Net sales increased, but low PBT was due to enforcement of the new wage agreement,” said chairman and managing director S Narsing Rao. Going forward, Rao said that the company aims at an off-take of 113 million tonne in Q2, and an overall of 470 MT in FY13. Below is an edited transcript of his interview with Nayantara Rai. Q: What has been the exact hit of the wage hike on the bottomline? A: Third quarter is not a like to like comparison because last year first quarter the revised wage implementation was not applicable. Q: Production and off take has increased by roughly 6% year on year. Give us the impact of that on the top-line and what were the realisations? A: Due to growth of over 6.4-6.5% in the production and the off take, we have realised higher realisation on a quantity variant. Q: What about the rake availability, has that improved and how has it aided inventory liquidation? A: Rake availability has increased by about 9.1-9.2% over the last year, but you cannot totally depend only on the rake because now we have normally three modes of transport - MGR, rake and road. Though the rake has increased by more than 9%, the road volume has slightly come down, and therefore ultimately what matters is aggregate off take growth, which is about 6.3%. Q: The tax rate appears to have come in lower on year on year basis. Can you give us clarity on that front? A: There is a slight issue there because one of the subsidiaries, BCCL, is a board for industrial and financial reconstruction (BIFR) company. They have reported some profit, but it is still a BIFR company, and therefore we need to really adjust that after some time.