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Coal India Q1FY23 Review: E-auction realisations surprise positively...

ICICIdirect Research 11 Aug 2022 DISCLAIMER

What's Buzzing:

Coal India (CIL) reported a healthy performance in Q1FY23. For the quarter, topline, EBITDA and PAT, all came in higher than our estimates. Better-than-expected E-auction realisation aided CIL's performance for the quarter.

Context:

For Q1FY23, CIL reported consolidated topline of Rs 35092 crore, up 39% YoY and 7% QoQ (higher than our estimate of Rs 32505 crore). Consolidated EBITDA for the quarter was at Rs 12251 crore (up 153% YoY and 35% QoQ), significantly higher than our estimate of Rs 8436 crore. Ensuing consolidated PAT for the quarter was at Rs 8834 crore, up 178% YoY and 32% QoQ, significantly higher than our estimate of Rs 6013 crore.

Our Perspective:

For Q1FY23, Coal India's E-auction realisation for the quarter was at Rs4340/tonne, up 177% YoY and 78% QoQ (significantly higher than our estimate of Rs 2800/tonne). Aided by better than expected E-auction realisations, EBITDA margin and EBITDA/tonne came in notably higher than our estimate. Consolidated EBITDA margin for the quarter was at 34.9% compared to 19.2% in Q1FY22 and 27.8% in Q4FY22 (our estimate of 26.0%). EBITDA/tonne for the quarter was at Rs 690/tonne compared to Rs 302/tonne in Q1FY22 and Rs 504/tonne in Q4FY22 (our estimate of Rs 475/tonne). Going forward, as global coal prices are still hovering at healthy levels, CIL's e-auction realisation are expected to remain firm, going forward also, which augurs well for CIL's consolidated entity.

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