Coal India Q3 profit seen up 34% QoQ to Rs 4130 cr

State-owned Coal India (CIL), country's largest coal mining company, is set to declare its third quarter results on Wednesday. Analysts on an average expect the company to report growth in earnings due to higher sales volume and production numbers.

They expect profit after tax of the company to grow by 2.3 percent year-on-year and 34.2 percent quarter-on-quarter to Rs 4,130 crore in the quarter. Meanwhile, net sales are seen going up by 9 percent YoY and 15.3 percent QoQ to Rs 16,800 crore in October-December quarter, according to CNBC-TV18 poll.
Higher yields on its huge pile of cash will support its profit after tax in the quarter as other income contributes more than 45 percent of its PAT. CIL has cash & cash equivalent balances of approximately Rs 55,000 crore.
However, earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to fall by 2 percent YoY to Rs 4,444.2 crore in the quarter, but experts say QoQ EBITDA will jump more than 55 percent.
EBITDA margins are seen declining 310 basis points YoY to 26.5 percent, but the same will increase 690 basis points on QoQ basis.
Margins will contract on a YoY basis due to higher diesel prices, higher employee costs and lower e-auction sales. Diesel prices were hiked in September 2012 by Rs 5 per litre by government would impact on operating cost of the company.
Coal India has stated that diesel hike is likely to hit them to the extent of Rs 550 crore per annum.
Meanwhile, analysts expect coal production at 117 MT in December quarter, a growth of 2.4 percent YoY and 31.7 percent QoQ. Meanwhile, sales volume for Q3FY13 is expected to be at 119 MT, an increase of 8.8 percent compared to a year ago period and 18 percent compared to second quarter.
Increase in the coal sales attributed to higher rake availability from 165 rakes per day to 200 rakes per day in December 2012.
CIL has further bettered its off-take in January 2013. It has dispatched coal at the rate of 1.39 million tonnes per day as against 1.36 MT per day in December 2012 despite challenging weather conditions.
According to analysts, blended realizations are expected to increase by 3 percent but remain flattish QoQ as impact of price hikes at Western Coalfields (WCL) in June will be offset by declining e-auction volumes.
In Q2FY13, e-auction volumes stood at 11.5 percent of total sales. E-auction volumes are likely to come in at sub 11 percent of total sales volume in third quarter of FY13.