Coal India - E-Auction Sale Stoppage Is Transitory: Centrum Broking
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Centrum Broking Report
Amid ongoing temporary deficit of coal in India, Coal India Ltd. has been advised to prioritise coal supply to the power sector and not conduct any further e-auction of coal to the non-power sectors till the situation normalises. It can conduct special forward e-auction for the power sector.
At FY21-end, Coal India had ~100 million tonne (78 million tonne at March 2020-end) of coal inventory as power producers refrained from taking adequate coal, keeping their inventory at low levels in anticipation of lower power demand amid increasing Covid-19 cases.
This led Coal India to produce less in Q1 FY22 (up 2.5% YoY on a low base), liquidating its inventories.
With rising demand, the company started producing more from July, but was hit by heavy rains in September, which affected production and offtake.
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