Q4 Results: Coal India’s Profit Jumps Fourfold On Higher Margin

Coal India Ltd.’s quarterly profit beat estimates on higher margin and lower employee benefit costs.

Net profit jumped more than fourfold year-on-year to Rs 6,024.16 crore in the January-March quarter, the world’s largest coal miner said in an exchange filing. That compares with the Rs 4,930-crore consensus estimate of analysts tracked by Bloomberg.

Revenue rose 7.5 percent over the last year to Rs 28,546.3 crore. Its sales volume rose 2.9 percent to 163.51 million tonnes.

The company’s earnings before interest, tax, depreciation and amortisation, jumped on account of lower base. Its operating profit stood at Rs 8,212 20 crore in the three months ended March compared with Rs 193.34 crore a year ago. Operating margin, too, expanded to 28.7 percent from 0.7 percent.

Production Target

Coal India missed its production and offtake targets by the narrowest margin in 13 years for the fiscal ended March 2019 even as output and dispatches rose. Its production rose 7 percent year-on-year at 607 million tonnes in 2018-19, it had said in a filing in April. That compared with its target of 610 million tonnes.

For FY20, Morgan Stanley projected the production and dispatch growth at 6 percent and 7 percent, respectively. The Indian government expanded the annual production target by 7.4 percent to 655 million tonnes for 2019-20 as it is “pushing for growth” in the power sector, said a Bloomberg Intelligence report prior to earnings release.

Shares of Coal India rose by nearly a percent to Rs 255.40 apiece ahead of the earnings announcement compared with a 0.71 percent gain in the benchmark Nifty 50 Index.