Coal India, single largest coal producing company in the world, is expected to report a 31 percent YoY (year-on-year) decline in its net profit for Q1FY24 due to softening of prices in e-auctions.
According to an average of the standalone estimates from Motilal Oswal Financial Services Limited, Kotak Institutional Equities, Axis Securities and Elara Capital, the company is expected to report a net profit of Rs 6,125 crore, down from Rs 8,834 crore reported in Q1FY23. Meanwhile, sequentially, the net profit is expected to increase by 10.79 percent QoQ (quarter-on-quarter) from Rs 5,528 crore reported in the March quarter.
Based on the mean consensus of the above-mentioned brokerage firms, Coal India is expected to report a revenue of Rs 34,501 crore in Q1FY24, which would be a 1.68 percent decrease YoY from Rs 35,902 crore reported in Q1FY23. Sequentially, the revenues are expected to decrease by 9.56 percent from Rs 38,152 crore reported in Q4FY23.
The mean EBITDA (earnings-before-interest-taxes-depreciation and amortisation) margin in Q1FY24 is expected to be 23.8 percent, representing a 570 basis points decline YoY from 29.7 percent in Q1FY23. Sequentially, the margins are expected to increase by 1270 basis points from 11.1 percent reported in Q4FY23.
Analysts expect a YoY decline in net profit for the quarter owing to softening in e-auction prices despite volumes for sale in the e-auction being higher. Meanwhile, Axis Securities expects EBITDA margin to decline on a YoY basis on account of higher input cost inflation.
Sequentially, while the numbers for quarterly revenue and profit are expected to decline, the company has maintained a steady growth on its production front. In Q1FY24, Coal India reported a 10 percent YoY growth in the quarterly output at 175.5 million tonne. In the previous fiscal, the company had surpassed its own target of annual coal production at 703.4 million tonne. The coal mining major now expects to meet a target of 780 million tonne by the end of FY24.
Coal India Limited, a state-owned ‘Maharatna’ company, is engaged in the coal mining and production industry. It operates through 84 mining areas across India, extracting and supplying coal to various sectors, including power generation, steel, cement, and other industries. It plays a significant role in meeting India's energy needs by contributing to more than 80 percent of coal mined annually.
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