Coal India May Post Its Lowest Profit In Eight Quarters
Good monsoon and lower offtake may hurt Coal India’s volumes.
Coal India Ltd., the world’s largest coal miner is expected to report its lowest profit in the last eight quarters.
The state-run miner’s net profit is expected to fall 11 percent on a year-on-year basis to Rs 2,263.5 crore, while revenue is likely to remain flat at Rs 16,614 crore, according to Bloomberg consensus estimates.
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The pick-up in monsoons this year, coupled with lower offtake by clients and high inventory at power plants, is likely to weigh on production and dispatch volume growth. Coal offtake fell by 5 percent in the second quarter to 115.93 million tonnes, versus the same period last year.
Earnings before interest, tax and depreciation is expected fall 7 percent due to lower volumes, lower e-auction realisations and impact of wage hike provisions. The average realisations earned by Coal India in the second quarter was Rs 1,525 per tonne, which is half of what was realised a year ago.
Employee cost, contractual expenses and global coal prices would be key things to watch out for in the future
Coal India’s stock has underperformed the Nifty Metal Index on a year-to-date and month-to-date basis, falling 7.4 percent. The stock shut shop on Monday at Rs 305.3 apiece.
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Sixty-eight percent of analysts tracked by Bloomberg have a buy rating on Coal India, according to Bloomberg data.