- 28 Oct 2024
- ICICI Securities
LOWER VOLUMES COMBINED WITH HIGHER COSTS WEIGHED ON PROFITABILITY FOR THE QUARTER
News: Total operating income for the quarter came in at ₹30,673 crore (down 6% YoY & 16% QoQ) with coal sales volume of 168 million tonne (down 4% YoY, 16% QoQ). Reported EBITDA for the quarter came in at ₹8,617 crore with corresponding EBITDA margins at 28% (down ~253 bps YoY). EBITDA/tonne for Q2FY25 came in at ₹514/tonne vs. ₹722/tonne in Q1FY25 vs. ₹578/tonne in Q2FY24. PAT stood at ₹6,275 crore (down 22% YoY). The company declared a first interim dividend for FY25 of ₹15.75 per share.
Views: Alongside muted volume prints, a reduced contribution from E-Auction Volumes and lower FSA Realisation further impacted the revenue for the quarter. Moreover, an increase in employee and overhead expenses has led to decline in EBITDA/ton to below ₹550/ton, marking its lowest in the past 6 quarters. However, from a long-term perspective Coal India remains promising, driven by its ambitious goal of reaching 1000 MT of coal production by FY26, robust demand from the power sector, diversification into other segments like critical minerals and power segment, investments in new technology domains such as coal gasification, inexpensive valuation, and healthy dividend yield.
Impact: Negative