Coal India Q4 Review - Better Than Expected Realisations, Lower Cost Drive Beat: Motilal Oswal
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Motilal Oswal Report
Coal India Ltd.’s result highlights a sequential recovery in e-auction realisations. This, combined with lower-than-expected costs, led to a beat on our numbers.
Adjusted Ebitda (excluding overburden removal) at Rs 80 billion was 38% ahead of our estimate.
For the first two months of FY22, the company’s dispatches are up 38% YoY.
With improving offtake and realisations, we see operating leverage coming into play in FY22.
Notwithstanding any further negative shocks, we expect the company’s profitability to recover in FY22 (up 23% YoY).
Capex run-rate is likely to increase in the near-term, but higher dispatches and some normalisation in receivables should aid cash generation and help maintain dividend (dividend yield: 11%).
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