Coal India - One-Off Quarter; Improved Outlook On E-auction Realisations Drives Upgrade: Prabhudas Lilladher
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Prabhudas Lilladher Report
Coal India Ltd. reported Q1 FY22 earnings below our estimates.
Adjusted Ebitda grew 64% YoY to Rs 46.6 billion against our estimate of Rs 72.3 billion.
The miss was largely due to one-time provision of Rs 6 billion in employee cost and low operating leverage.
Our optimism on Coal India is based on:
sharp rise in E-auctions realisations (up ~20% over Q1 average in June and July) expected in coming months,
higher operating leverage due to bottomed-out inventory levels and
improving balance sheet with reduction in receivables.
Admittedly, stock has been trading at attractive valuations for a long time, in line with global peers.
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