Coal India Q2 PAT may rise 7.4% at Rs 3305cr: Motilal Oswal

Motilal Oswal has come out with its second quarter (July-September) earnings estimates for the utilities sector. The brokerage house expects Coal India to report a 11.5 percent decrease quarter-on-quarter (up 7.4 percent Y-o-Y) in net profit at Rs 3305 crore.

Sales of Coal India are expected to decrease by 4.8 percent Q-o-Q (up 7.6 percent Y-o-Y) to Rs 15674.4 crore, according to Motilal Oswal. Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to fall by 18.4 percent Q-o-Q (up 12.8 percent Y-o-Y) to Rs 3228.5 crore. Motilal Oswal's Report on Coal India: We expect Coal India to report PAT of INR 33 billion (up 7.4 percent Y-o-Y). For 2QFY14E, we expect dispatches to be 108mt (up 7 percent Y-o-Y). We estimate CIL's production in 2QFY14E at 95mt, up 6 percent Y-o-Y. RB Index has declined Q-o-Q to USD 73/tonne, v/s USD 81/tonne in 1Q. For 2QFY14E, currency has depreciated on a sequential basis from 57/USD to 62.5/USD. Hence, the lower coal prices were up to a large extent neutralized by the higher currency rates. Rupee deprecation thus acts as a cushion to e-auction realizations. The ACQ realization is expected to be higher in 2QFY14E Y-o-Y, as CIL had taken a tariff hike effective from mid-May to compensate for the
decline in e-auction realizations and beneficiated coal. Workers union has postponed its three-day strike to December 2013 led by assurance by the management to facilitate further discussion
with the Government on OFS. We expect the company to report consolidated PAT of INR 187 billion in FY14E (up 5.8 percent Y-o-Y) and INR 198 billion in FY15E (up 6.2 percent Y-o-Y). Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.