Coal India Q4 Review - Better Than Expected Realisations, Lower Cost Drive Beat: Motilal Oswal

A rake stands on a pile of coal.  (Photographer: Kuni Takahashi/Bloomberg).

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%).

Click on the attachment to read the full report:

Motilal Oswal COAL India Q4FY21 Result Update.pdf

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