Coal India Ltd Result update: Q1FY24
Company Overview:
Coal India Ltd, incorporated in 1973, plays a pivotal role in India’s coal mining and production sector. Operating across approximately 82 mining areas in eight states, it contributes an impressive 82% to the nation’s coal production. The company primarily serves the power and steel sectors, with additional consumers from industries such as cement, fertilizers, brick kilns, and more. Recognized as a ‘Maharatna’ company under the Ministry of Coal, Government of India, Coal India Ltd is headquartered in Kolkata, West Bengal.
Product Portfolio:
Coal India Ltd’s product portfolio encompasses coking coal, essential for steel and metallurgical industries; semi-coking coal, utilized in steel production, merchant coke manufacturing, and metallurgical processes; non-coking coal, primarily for power generation and also in sectors like cement, fertilizer, glass, ceramics, paper, and chemicals; and washed and beneficiated coal, essential for hard coke manufacturing, power generation, cement, and sponge iron production.
Mining Projects:
The company has recently approved 24 coal mining projects with a combined capacity of 140.3 million tonnes per year, representing a sanctioned capital investment of Rs 22,130.22 crore. These projects are expected to significantly contribute to the company’s production capacity in the coming years.
Major Consumers:
Coal India’s major consumers include the power sector, accounting for 82% of its total output, and the steel sector, alongside various other industries such as cement, fertilizer, brick kilns, and numerous others.
Capital Expenditure in FY22-23:
During the fiscal year 2022-23, the company invested a substantial Rs 18,619.27 crore in capital expenditure, marking a remarkable 20.9% YoY growth. This robust capital investment is anticipated to yield positive results in terms of enhanced production and improved coal transportation in the future.
Coal Production in FY22-23:
In FY 22-23, Coal India achieved an impressive coal production of 703.2 million tonnes, surpassing its target with a 100.5% satisfaction rate. This represents a remarkable 13% growth compared to the previous year, with an increase of 80.6 million tonnes produced in a single year, an unprecedented achievement in the company’s history. Several coal-producing subsidiaries, including BCCL, MCL, NCL, WCL, and CCL, exceeded their production targets for 2022-23.
Capacity Utilization:
The year 2022-23 witnessed a significant increase in the volume of coal and overburden handled by Coal India, reaching approximately 2079 million cubic meters. The overall system capacity utilization rose to approximately 85.80%, a substantial increase from the previous year’s approximately 77%.
Q1FY24 Results Updates – Consolidated:
In Q1FY24, Coal India reported a 2.5% YoY revenue growth, totaling Rs 35,983 crore. Operating profit decreased by 14.2% YoY to Rs 10,514 crore, although it showed a notable increase of 52.4% QoQ due to reduced employee and repair costs, down by 29% and 52% QoQ, respectively. Coal offtake volume reached 187 million tonnes, a 5% YoY increase in line with provisional volume numbers. Profit after tax (PAT) declined by 9.8% YoY but saw a significant 44.1% QoQ improvement, totaling Rs 7,971 crore. EBITDA margins rose by 1113 bps QoQ while declining by 570 bps YoY to 29.2%. Earnings per share (EPS) for the quarter stood at Rs 12.9, down by 9.8% YoY.
