ICICIdirect.com's report on Coal India Total operating income for Q3FY15 came in at Rs 17762.9 crore, up 13.3% QoQ and 4.9% YoY and above our estimate of Rs 17041.6 crore. Total sales volume at 124.6 million tonnes (MT) was in line with our estimate of 124 MT while blended realisation was at Rs 1426/tonne (up 0.5% QoQ)
E-auction volume for the quarter came in at ~5.6 MT (down 47.3% QoQ). E-auction realisation came in at Rs 3134/tonne (up 25.6% QoQ)
FSA volume for the quarter stood at 114.7 MT while FSA realisation came in at Rs 1298/tonne (up 3.0% QoQ) and better than our estimate of Rs 1285/tonne
On account of healthy FSA and e-auction realisation coupled with in line total sales volume, EBITDA margin for the quarter came in at 19.6%, higher than our estimate of 17.8%. The ensuing EBITDA came in at Rs 3480 crore, down 15.2% YoY but higher than our estimate of Rs 3039.8 crore
The consequent PAT came in at Rs 3262.5 crore, declining 16.2% YoY. It was lower than our estimate of Rs 2927.8 crore
"For the quarter, Coal India reported a healthy performance on the back of a sequential rise in blended realisation and e-auction realisations. Subsequently, we have revised upwards our blended realisation estimate. We have modelled blended realisation of Rs 1463/tonne for FY15E (Rs 1452/tonne earlier), Rs 1520/tonne for FY16E (Rs 1500/tonne earlier) and introduced at Rs 1576/tonne for FY17E. We have modelled e-auction sales volume of 45 MT for FY15E (40 MT earlier), 45 MT (35 MT earlier) for FY16E and introduced at 45 MT for FY17E. We have valued the stock at 7x FY17E adjusted EV/EBITDA (adjusted for overburden removal) and arrived at a target price of Rs 415 assigning a BUY rating", says ICICIdirect.com research report.
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