MOSL: COAL INDIA (Buy)-In-line-Higher prices and volumes drive strong perf.; Volume growth accelerating
Coal India: In-line; Higher prices and volumes drive strong perf.; Volume growth accelerating; Maintain Buy
(COAL IN, Mkt Cap USD24.9b, CMP INR276, TP INR345, 25% Upside, Buy)
- COAL's 1QFY19 revenue grew 27% YoY to ~INR243b (est. of INR245b), led by FSA realization increase of ~9% YoY to INR1,313/t (est. of 1,322) on account of benefit of price hike, e-auction realization increase of 51% YoY (+14% QoQ) to INR2,399/t (est. of INR2,100), and volume increase of ~11% YoY to 153mt. Revenue growth was also aided by doubling of other operating income to INR16.6b on account of evacuation charges of INR50/t introduced in Dec'17.
- EBITDA (ex-OBR) increased 94% YoY (-34% QoQ) to ~INR66b (est. of ~INR70b). The miss was driven primarily by higher employee cost, which includes ~INR3b for pension liabilities related to prior years, adjusted for which EBITDA is broadly in line.
- Cost of production (ex-OBR) declined ~4% YoY to INR1,041/t, despite higher employee cost.
- Other income was unchanged YoY at INR12b. Depreciation increased 11% YoY to INR7.4b. PAT increased by a lower 61% YoY to INR37.8b (est. of INR47b) due to a higher tax rate and higher non-cash OBR charge.
Coal India is engaged in the identification, exploration, and production of coal in India. Co. offers coking coal primarily for use in steel making and metallurgical industries, and for hard coke manufacturing; semi coking coal for use as blend-able coal in steel making, merchant coke manufacturing, and other metallurgical industries; NLW coking coal for use in power utilities and non-core sector consumers; non-coking coal for use as thermal grade coal for power generation, as well as for cement, fertilizer, glass, ceramic, paper, chemical and brick manufacturing, and for other heating applications.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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