ICICI Securities: Coal India Logs One-Off Quarter Due To Operating Deleverage; Improvement Already Underway

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Securities Report.Coal India Ltd.’s Q1 FY21 profit after tax declined 55.1% YoY to Rs 20.8 billion mainly due to lower revenues and operating deleverage on the back of higher contractual expenses due to higher over burden removal (OBR) (preparing for higher production in the coming months), all of which is expected to normalise in the coming quarters.Other income was lower as cash balance declined with mounting receivables.Revenues fell 25.9% YoY to Rs 184.9 billion with decline in both offtake (by 21.5% YoY) and average realisation (by 6.7% YoY) as well as inventory liquidation.We remain positive on the stock since July-August 2020 witnessed significant growth in production and offtake, and better e-auction premiums.Expenses, booked as normal, are expected to improve operating leverage from Q2 FY21.Also, liquidation of dues helped by the Power Finance Corporation / Rural Electrification Corporation scheme is expected to restore cash balance to pre-Covid-19 levels.Although our volume estimate for FY21E remains at 580 million tonne, Coal India is confident of exceeding it..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

ICICI Securities: Coal India Logs One-Off Quarter Due To Operating Deleverage; Improvement Already Underway

ICICI Securities: Coal India Logs One-Off Quarter Due To Operating Deleverage; Improvement Already Underway

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