. COAL INDIA: The black diamond: Once shunned, now sought after (COAL IN, Mkt Cap USD17.7b, CMP INR230, TP INR290, 26% Upside, Buy) We expect global coal demand to remain strong in the near term as the world recovers from the pandemic and Europe shifts to renewables (in the long term) from Russian gas, increasing dependency on coal in near term. We believe with continued heat wave in China, the hydro electricity production should reduce further, therefore, increasing reliance on thermal co...
The general evaluation of COAL INDIA (IN), a company active in the Coal industry, has been upgraded by the independent financial analyst theScreener with the addition of a star. Its fundamental valuation now shows 3 out of 4 possible stars while its market behaviour can be considered as moderately risky. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Slightly Positive. As of the analysis date January 11, 2022, the closing price was INR 158.55 and...
COAL INDIA: e-auction recovery in sight, premiums to stay (COAL IN, Mkt Cap USD13.1b, CMP INR159, TP INR200, 26% Upside, Buy) COAL's 2QFY22 e-auction premiums have been disappointing. However, the management highlighted that the current premium is over 50% compared to the 15.3% reported in its 2QFY22 result. It has re-started e-auction to non-regulated sectors, which should result in improved profitability. The management expects the price hike to offset an increase in wages, given the c...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
Q3FY20 result- lower volumes hit earnings Coal India reported adj EBITDA ex-OBR of Rs. 61.8bn (IDFCe: Rs 61.5bn), down 22% yoy due to 8% yoy decline in volumes, adverse product mix and higher mining cost. Coal sales volume at 142mt, was down 8% yoy with ~90% of coal being supplied under FSA (88% in Q3FY19). Volume under FSA stood at 128mt (down 6% yoy) and e-auction volumes stood at 9.8mt (down 33% yoy). Coal realisation under FSA stood at Rs1,411/t, up ~6% yoy. Though Coal India has not ...
COAL INDIA: Profit decreases on lower offtake (COAL IN, Mkt Cap USD15.5b, CMP INR179, TP INR258, 44% Upside, Buy) Valuations attractive; dividend yield of ~10% Coal India's (COAL) results highlight the impact of lower volume offtake amid subdued thermal power demand. FSA realizations though were higher YoY on account of increased share to non-power and better grade. Production at the company's mines has started to ramp up post heavy monsoon, and we expect offtake to improve as power dem...
Q2FY20 result- lower volumes offset higher realisation Coal India reported adj EBITDA ex-OBR of Rs. 42.5bn (IDFCe: Rs 34.9bn), down 17% yoy due to 11% decline in volumes partly offset by higher realisation. However, the beat on estimates was due to higher FSA realisation/t of Rs1,438 (5% higher than IDFCe) and lower employee cost (Rs90.7bn vs IDFCe: Rs95bn). Coal sales volume at 122mt, was down 11% yoy with ~85% of coal being supplied under FSA (85% in Q2FY19). Volume under FSA stood at 10...
COAL INDIA: Better FSA realization, e-auction volumes drive beatCOAL INDIA: Better FSA realization, e-auction volumes drive beat(COAL IN, Mkt Cap USD18.1b, CMP INR210, TP INR278, 32% Upside, Buy) ** Coal India's (COAL) revenue declined 7% YoY to ~INR204b (our estimate: INR191b) in 2QFY20 due to lower sales volumes (-11% YoY at ~122mt, in-line). However, FSA realization was up 12% YoY on account of higher sales to the non-power sector and lower grade slippage. ** Cash cost (ex-OBR) increased 8% ...
Coal India Ltd’s (CIL) stock slid ~17% over last six months, pressured by declining volumes and continuous stake sale by government through ETFs. A consistent fall in the Maharatna’s H1FY20 volumes was due to strikes at some subsidiaries, heavy monsoon impacting output and evacuation due to disruption of roads, etc. Contrary to our earlier view of volume recovery October onwards, we now estimate ~20% decline even in October. As a result, we have cut our FY20E/FY21E EBITDA by 19%/10%, respectivel...
coal india: A case of misplaced valuations; Attractively valued at ~3x EV/EBITDA (COAL IN, Mkt Cap USD16.7b, CMP INR195, TP INR264, 36% Upside, Buy) FY19 turned out to be a standout year for Coal India (COAL), with its adj. EBITDA increasing 48% YoY led by higher realizations. The company’s ability to hike FSA prices and increase evacuation charges is a reflection of its dominant position in the industry, in our view. Moreover, even after the price hike, FSA prices are 30-40% lower than the...
Q1FY20 result- Higher realisation and cost control boost EBITDA Coal India reported adj EBITDA ex-OBR of Rs. 75.1bn (IDFCe: Rs 72.6bn), up 13.5% yoy despite flattish volumes primarily due to higher realisation and cost control. Coal sales volume at 153mt, was flat yoy with 85% of coal being supplied under FSA (85% in Q1FY19). Volume under FSA stood at 130mt (flat yoy), whereas e-auction volumes stood marginally down at 19.1mt. Coal realization under FSA stood at Rs 1,370/t, up 4% yoy (down ...
COAL INDIA: Better FSA realization drives beat; Valuations attractive; Dividend yield of 9-10% (COAL IN, Mkt Cap USD17.6b, CMP INR204, TP INR278, 36% Upside, Buy) 1QFY20 revenue grew 4% YoY to ~INR249b (v/s est. INR237b) led by FSA realization increase of ~6% to INR1,370/t (v/s est. INR1,310/t), which was partly offset by lower e-auction realizations at INR2,155 (-10% YoY/-22% QoQ). Volumes were flat YoY at ~153mt (in-line). The increase in FSA realization was due to hike in coking coal p...
Coal India: Targeting production of 1 billion ton by 2024/25; Coal to remain the dominant energy source in India (COAL IN, Mkt Cap USD22.5b, CMP INR255, TP INR310, 21% Upside, Buy) Coal India (COAL) hosted its annual investor meet on 17th Jun’19. Key highlights: Growth potential remains strong According to COAL, India will continue depending on coal to secure its energy needs over the next 10-20 years, particularly considering the country’s low per capita electricity consumption and t...
Q4FY19 result- Higher realisation and cost control boost EBITDA Coal India reported adj EBITDA ex-OBR of Rs 104.2bn (IDFCe: Rs 105.6bn), up 3.7% yoy. EBITDA could have been higher but was offset by higher employee cost which included one-time cost of ~Rs6.5bn (arrears related to new pension scheme introduced w.e.f Oct 2017). Year-end performance incentive income stood at ~Rs8bn. Coal sales volume at 164mt, was up 2.9% yoy with 87% of coal being supplied under FSA (79% in Q4FY18) leading to a...
Coal India: Better grades and lower CoP drive outperformance; Valuations attractive; dividend yield of 7-8%; Maintain Buy (COAL IN, Mkt Cap USD22.3b, CMP INR253, TP INR307, 22% Upside, Buy) Revenue grew 6% YoY to ~INR285b (our estimate: INR283b) in 4QFY19, led by an increase of (a) ~4% YoY in FSA realization (INR1,460/t v/s our estimate of INR1,388), (b) 30% in e-auction realization (INR2,754/t v/s our estimate of INR2,619) and (c) ~2% in volumes (163.1mt; volume mix was weak). FSA realiz...
Coal India: Coal demand to rise 3x even after tapping RE potential; Valuations at 50% discount to its averages and dividend yield at 9-10% (COAL IN, Mkt Cap USD18.7b, CMP INR215, TP INR281, 31% Upside, Buy) Coal India (COAL) has witnessed unprecedented de-rating over the past 2-3 years. Its stock is currently trading at 7.4x P/E v/s average of 14x (Exhibit 1:), despite strong RoE at 35-40% (Exhibit 2:) and 3.5x EV/EBITDA v/s average of 7.2x (Exhibit 3:). The company continues to generate st...
Q3FY19 result- Higher realisation and cost control boost EBITDA Coal India reported higher than expected adj EBITDA ex-OBR of Rs. 79.7bn (IDFCe: Rs 64.2bn), up 50% yoy. The beat was on account of better than expected realisation under both FSA (due to higher premium in coal supplied via linkage auction and favourable product mix) and e-auction. EBITDA/t stood at Rs518, up 49% yoy. We note that the coal quality has improved which led the company to write back the provisions made earlier on grade...
Coal India: Gaining from price hike and strict control over costs; Valuations attractive; Maintain Buy (COAL IN, Mkt Cap USD19.6b, CMP INR223, TP INR338, 52% Upside, Buy) Revenues increased 16% YoY to ~INR250b, as against our est. of INR239b, led by (a) FSA realization increase of ~13% to INR1,334/t, as against our est. of INR1,310/t, (b) e-auction realization increase of 43% (10% QoQ) to INR2,847/t, as against our est. of INR2,500/t, and (c) volume increase of ~2% to 154.1mt (volume mix ...
Q2FY19 result- Cost control, high prices offset lower e-auction volumes Coal India reported in-line adj EBITDA ex-OBR of Rs. 51.6bn (IDFCe: Rs 51.2bn). High coal prices (up 13% yoy to Rs1,503/t) and volumes (up 4.7% yoy to 138mt) along with lower CoP due to lower employee cost (down 3% yoy to Rs1,237/t) led EBITDA ex-OBR adj to increase 3x on a yoy basis. Results could have been much better if it would have not reduced e-auction volumes (down 24% yoy to 18mt). Coal sales volume at 138mt, was...
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