Q1 Results: Coal India’s Profit Misses Estimates

Coal India Ltd.’s profit rose the most in at least six years. Yet, it missed street estimates due to more-than-expected increase in employee benefit expenses.

Net profit stood at Rs 3,786.4 crore in the April-June period, a rise of 61.1 percent from the year-ago period, according to the coal miner’s exchange notification. That missed the Rs 4,228-crore consensus estimate of analysts tracked by Bloomberg. That was largely due to an 18 percent increase in employee benefit expenses to Rs 9,598 crore. However, the rise in bottomline was the most in at least over 25 quarters, according to data compiled by Bloomberg.

Net sales climbed 22.8 percent to Rs 22,598 crore, compared with the Rs 24,002-crore forecast. The company’s sales volume rose 11.7 percent to 153.4 million tonnes for the three months ended June, according to a separate stock exchange notification, dated July 1.

The company’s operational performance also missed estimates. The operating income or the earnings before interest, tax, depreciation and amortisation rose 62.8 percent to Rs 5,732.4 crore. The consensus estimate was Rs 6,481 crore. The company’s operating margin expanded to 23.6 percent during the period from 18.4 percent, below the analysts’ forecast of 27 percent.

• Overall realisation at Rs 1,476/tonne.
• Provision declined by 9 percent from last year to Rs 110.2 crore.
• Power expenses to net sales ratio reduced to 2.6 percent.
• Other expenses to net sales ratio declined to 4.91 percent.

Shares of Coal India closed 0.98 percent lower at Rs 277.35 on Friday. The stock has gained 4.9 percent so far this year, lagging the 8.5 percent rise of the benchmark NSE Nifty 50 Index.

Coal India faces an overhang with the government needing to sell 5-10 percent of the company by Aug. 21 to meet listing requirements of a 25 percent public float, according to a Bloomberg Intelligence report. “While the company is conducting roadshows globally, a price hasn’t been decided yet,” the report noted.