Coal India is expected to report a sharp fall in Q2 profitability on the back of drop in e-auction volumes but that may be partly offset by higher e-auction prices. Quarterly earnings will be announced on November 8.
According to the average of estimates of analysts polled by CNBC-TV18, profit is likely to be flat at Rs 3,060 crore in July-September quarter as against Rs 3,052.4 crore in same quarter last year. Net sales are seen rising 4.1 percent year-on-year to Rs 16,040 crore from Rs 15,411.5 crore.
Operating profit may increase 4.9 percent on yearly basis to Rs 2,930 crore and margin may expand by 20 basis points to 18.3 percent in the quarter gone by.
Factors:
Coal offtake is likely to be marginally higher by 1-2 percent at 111 million tonnes. Coal India has diverted e-auction volume to meet power sector coal needs as directed by coal ministry.
Fuel supply agreements realisations may be flattish sequentially and e-auction prices may be rise 15-20 percent on sequential basis but softer international prices may pressurise realisations.
E-auction sales are likely to be sub 5 million tonnes in Q2FY15 as against 12.8 million tonnes in Q2FY14 and 16.8 million tonnes in Q1FY15.
Blended realisation is expected to be soft due to significant diversion of e-auction coal.
Key issues to watch out for are volume mix, realisation trend and guidance for FY15; modalities of coal import; news flows on price hike; government’s pending sale of its partial stake; and rake availability per day.
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