Coal India Ltd.’s output rose at its slowest pace in four years as the world’s biggest miner of the fuel missed the target for at least the seventh straight year.
The miner produced 567.37 million tonnes of coal in the year ended March, up 2.4 percent over the previous 12 months, according to its exchange filing. That’s the lowest since 2013-14 when production grew at 2.3 percent. The output in 2017-18 also fell short of the targeted 600 MT.
Muted demand from the power sector in the first quarter and higher inventory level led to a dip in Coal India’s annual production, said Managing Director Gopal Singh. Although rake availability improved substantially, logistics still remains an issue, he said. Inventory stood at 55.49 MT as of April 1 compared with 68.42 MT a year ago.
The growth would have been higher had it not been for a production drop in one of Coal India’s largest subsidiaries—Mahanadi Coalfields Ltd.—in the first seven months of the financial year, said Jayanta Roy, senior vice-president and head, corporate sector ratings, ICRA. The under-performance was also caused by rake unavailability issues in the third quarter and lower production at Bharat Coking Coal and Central Coalfield, he said.
Mahanadi Coalfields’s output fell in the first seven months on account of law and order-related issues. It has since ramped up production to register an overall growth rate of 2.8 percent for the full year, Roy said. Its output had fallen 2.3 percent in April-October.
Dispatches Miss Target
Coal India’s off-take rose 6.8 percent to 580.28 MT, missing the 600 MT target. It reported highest-ever off-take of 2 million tonnes in a single day. The company dispatched 344.5 coal rakes, higher than the benchmark of 342, a day.
- The miner supplied a record 454.3 MT of coal to the power sector, a year-on-year growth of 7 percent.
- Supply of coal to non-power sector stood at a record 126.3 MT, up 7 .1 percent over the previous year.
Capex Exceeds Target
The company’s capex stood at Rs 8,697 crore against the targeted Rs 8,500 crore.
Much of it was spent towards boosting company’s output and investment in washeries. This doesn’t seem to be significantly higher given the size of the company.Goutam Chakraborty, Analyst, Institutional Research, Emkay Global Financial Services