Coal India Limited is expected to report a jump of 45 percent year-on-year in its consolidated profit after tax (PAT) for the quarter ended March 2022. The consolidated revenue is expected to jump 15 percent over the year-ago period. Brokerages, however, differ in estimating both the topline as well as the bottomline.
According to the average of forecast made by three brokerages that Moneycontrol had access to, the company is expected to report a PAT of Rs 6,590 crore for the reported quarter and expect revenue to come in at Rs 30,800 crore.
The state-owned miner had recorded a consolidated net profit of Rs 4,589 crore in the same period a year ago on a consolidated revenue of Rs 26,700 crore.
The company - the largest coal miner in the country - had registered a net profit of Rs 5,447 crore on a revenue of Rs 28,434 crore during the October–December 2021 period.
The growth is fuelled by higher offtake and better realizations.
Brokerage Views
According to a report from the brokerage firm ICICI Securities, Coal India produced 209 million tonnes (MT) of coal during the quarter as against 203.4 MT produced during the same period last year. This is a sequential growth of 27.6 percent over 163.8 MT production in the previous quarter.
The offtake during the quarter was 180.2 MT growing by 9.3 percent on year and 3.7 percent sequentially.
The brokerage sees the average realizations improving marginally by 1.9 percent on year and 1.1 percent QoQ to Rs 1,513 per ton.
“Coal India’s Q4FY22 PAT is estimated to be 25 percent higher YoY at Rs 5,730 crore mainly due to 9.3 percent growth in offtake and 1.9 percent YoY increase in average realisation at Rs 1,513/ton boosted by higher e-auction realisations,” a report from ICICI Securities said.
The e-auction volumes are likely to be lower as the company prioritised despatch to the power sector during the quarter. Experts believe that the coal demand in India will continue to be high as 140GW (Giga Watts) out of the daily peak demand of 195GW over the past weeks is being catered by thermal power and average coal inventory at power plants remains low at nine days.
ICICI Securities sees the EBITDA (earnings before interest, tax, depreciation and amortization) improving by 220 bps on year to 26.1 percent, a sequential improvement of 210 bps.
Kotak Institutional Equities pegs the revenue growth at 14 percent on-year and 7.5 percent on quarter to Rs 27,930 crore with EBITDA margins of 27.4 percent resulting in a PAT of Rs 6,570 crore for the quarter. A YoY growth of 43.2 percent and a sequential increase of 44.2 percent.
“A favourable base aids 13 percent YoY growth in dispatches at 186 million tons in Q4FY22, also aided by higher import substitution owing to the elevated prices of imported coal,” a report from Kotak Institutional Equities said. “Blended realizations at Rs 1,499/ton in Q4FY22 reflect improvement in e-auction realisations.”
The brokerage firm Motilal Oswal has the most optimistic forecast about the performance of the company during the quarter. It forecasts a year on year growth of 31.6 percent in revenue at Rs 35,130 crore, a sequential increase of 23.5 percent. It forecasts a PAT of Rs 7,470 crore with a YoY growth of 62.7 percent.
Experts are of the opinion that the focus shall remain on the coal price outlook and availability of coal for e-auction going forward while management guidance on FY23 Coal production and dispatch will be important along with capex, diversification through JV.
Disclaimer: The views and investment tips of investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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