The country's largest coal mining company Coal India missed street estimates on Thursday. Its Q4FY15 net profit fell 4.4 percent year-on-year to Rs 4,238.5 crore due to higher tax cost and lower other income.
In an interview to CNBC-TV18, Bipin Kumar Saxena, director, Coal India says the company will try to maintain its 26-30 percent EBITDA margins in the current financial year too.Below is the verbatim transcript of Bipin Kumar Saxena’s interview with Sonia Shenoy and Nigel D’souza on CNBC-TV18.
Sonia: What were exactly were the e-auction volumes this time around and what would you expect them to be in the first half of FY16?
A: Last year the e-auction volumes have been something around 46 million tonn es against a level of 58 million tonnes in 2013-2014. And this year, in fact we have planned coal level somewhere between 7-10 percent that will be somewhere the range where we will be doing the auction.
Nigel: In terms of your incentives, you receive it in the final quarter, could you give us that number, what it was and could you give me the comparative number for last year as well? Was it Rs 800 crore or was it Rs 1,000 crore?
A: Actually 2014-2015 off-late has not been completed, but it should be somewhere around Rs 800-1,000 crore. Somewhere it should be around that only.
Nigel: So, that would be higher on a year-on-year basis or it would be lower?
A: Last year it was Rs 1,200. So, this time, it will be somewhere around Rs 800-1,000 crore. We are almost nearing that only.
Nigel: You had also told my colleague that in fact the e-auction volumes for the year was around 46 million tonnes approximately, for the quarter was it 13 million tonnes?
A: For this quarter?
Nigel: For the last quarter what was the realisation? Was it Rs 2,500-2,700 per tonne and also what was the volume?
A: The volume, in fact, I do not know the volume but the total year was 46 and in fact in the first half of the year, it was less but the second half of the year, the power plants got stocks build up to a level of 26 million tonnes. The e-auctions volumes also increase subsequently.
Sonia: Since the production has been rising in the last couple of weeks and months, can you give us a sense of what the earnings for Coal India could look like in the next year? Your margins have been steady at 26 percent. But both on the top-line and on the margin front what would you expect in FY16?
A: With this level of production, which have planned of 550 million tonnes, we will be certainly planning an earnings before interest, taxes, depreciation and amortization (EBITDA) of around 30 percent EBITDA to sales ratio. 30 percent ratio we will be planning around that.
Sonia: So, what would that mean in terms of EBITDA growth from the current levels?
A: We will be maintaining that level which presently this year we have got around 26 percent. We are planning to maintain somewhere between 26-30 percent EBITDA levels.
Nigel: Also I would want to know what is happening in terms of the provisions now? I have been looking at the numbers; this time around your provision number came in at around Rs 93 crore. That compares with a reading of around Rs 900 crore and on other quarters normally we get it at around Rs 300 crore to around Rs 900 crore. So, why were the provision and write-offs sharply low at only Rs 90 crore.
A: You can’t say much about that. This is because the provisions they have already been settled maybe probably during the three quarters, that is why the provision is less in fourth quarter.
Nigel: So, going ahead I am talking about the number in your profit and loss account. Going ahead as well could we see this number at around Rs 100-200 crore because that is a key reason Rs 900 crore comes down to Rs 93 crore and because of that we are seeing that margin expansion to around 26 percent, so could we see it in this range?
A: Yes, sure.
Nigel: Could you tell us what are the total receivables that you’ll have on your books? Was it around Rs 8000-9000 crore? There were various media reports over the last couple of weeks, what are the outstanding…(interrupted)
A: It was around Rs 11,000 crore.
Nigel: Also below your operating performance, your tax rate in fact is at around 39.4 percent. A couple of your subsidiaries had turned around, what exactly about this number or was it a balancing figure?
A: I don’t have the figures right in front of me so I will not be able to speak on that but I can tell you later on.
Sonia: Any view on whether we can expect a price hike going ahead in the first half of FY16?
A: Nothing on record as well but the board will certainly take call at the appropriate time.
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