Coal India Q2 Review- Good Volume Growth, But Costs Hurt; Price Hike Is The Need Of The Hour: ICICI Securities
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ICICI Securities Report
Coal India Ltd.’s reported profit after tax for Q2 FY22 was down 0.6% YoY at Rs 29.3 billion. However, adjusted profit after tax at Rs 32.3 billion was 9.4% YoY higher due to a one-time charge of Rs 4 billion (pre-tax) on actuarial valuation of higher medical benefits to retired employees, as recommended by the Comptroller and Auditor General (Rs 6 billion in Q1 FY22).
Further, higher diesel and explosive costs, higher depreciation and lower other income were other major reasons offsetting the higher volumes. These factors we believe may compel Coal India to undertake price hikes in the next few months.
Revenues were robust at Rs 233 billion, up 10.1% YoY, on 9.4% YoY growth in offtake volumes to 147 million tonne.
Average realisation was flat at Rs 1,448/tonne though e-auction realisations improved 10.9% YoY.
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