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  • Company update: Coal India — ADD — TP Rs.326

    Publish date: July 4, 2018

    Coal India surpassed estimates to register impressive growth in June 2018. Riding on high pro-duction volumes, strong performances of its subsidiaries and a weak base in June 2017, the government-controlled coal-mining company registered a growth of 8.2% year over year (yoy).

    Key highlights

    • Coal India subsidiaries performed well when compared to a weak June 2017. All subsidiaries, barring one, showed an increase in production volumes. Some of the subsidiaries showed as much as 23% increase in production from last year’s corre-sponding period.
    • The Kolkata-headquartered company has also managed to reduce its critical inven-tory — substance that may be dangerous, expensive or requires high maintenance.

    Valuation & outlook

    The future remains healthy for a company that recently saw its bottomline hurt by wage upgrades and falling grades of coal. But, the company can look forward to improve-ment in the fourth quarter of FY2018 due to increase in coal prices and evacuation charge. Increased power demand will also help boost the company’s profits in FY2019.

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