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Coal India: Standalone profits down 11.7% - Views on News from Equitymaster
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Coal India: Standalone profits down 11.7%
May 21, 2012

Coal India has announced the standalone results for the quarter (4QFY12) and year (FY12) ended March 2012. The company has posted a decline of 2% YoY and 11.7% YoY in net sales and net profits respectively. Here is our analysis of the results.

Performance summary
  • Net sales declined by 2% YoY during 4QFY12. This is due to 34.8% decline in production volume and 26.3% decline in offtake volume.
  • Operating margins improve to 24.7% from 3.8% in 4QFY11. This is despite 46% YoY rise in employee costs.
  • Other income increased by 16.8% YoY. This is due to higher dividend received from subsidiary companies.
  • Net profit for the quarter ended March ended 2012, declined by 11.7% due to higher interest and depreciation expenses.
  • For the full year ended March 2012, standalone net sales increased by 1.6% YoY while standalone net profit increase by 71.7% YoY. The increase in the net profit can be contributed to increase in dividend paid by the subsidiary companies and interest income.
  • The company has also recommended a final dividend of Rs 0.5 per share for FY12. This is over and above the interim dividend of Rs 9.5 per share for FY12.

Standalone operating and financial performance
(Million tons) 4QFY11 4QFY12 Change FY11 FY12 Change
Coal production 0.5 0.3 -34.8% 1.1 0.6 -45.5%
Offtake 0.4 0.3 -26.3% 1.1 0.8 -27.3%
(Rs m)            
Net sales 1,577 1,546 -2.0% 4,095 4,159 1.6%
Expenditure 1,517 1,164 -23.3% 5,487 5,324 -3.0%
Operating profit (EBDITA) 61 382 528.9% -1,392 -1,165 -16.3%
EBDITA margin (%) 3.85% 24.73%   -34.00% -28.02%  
Other income 13166 15388 16.9% 50,725 91,017 79.4%
Depreciation 17 22 32.3% 61 70 14.5%
Interest 578 949 64.4% 2036.6 3787.3 86.0%
Profit before tax 12633 14799 17.2% 47,236 85,995 82.1%
Exceptional items 1.9 -4.6   1.9 -4.6  
Tax -1227 2569   273 5,349  
Effective tax rate 37% 31%   37% 31%  
Profit after tax/(loss) 13858 12235 -11.7% 46,961 80,651 71.7%
No. of shares (m)         6,316  
Diluted earnings per share (Rs)*         12.8  
Price to earnings ratio (x)         23.5  
* On a trailing 12-months basis

What to expect?
This result considers the financials of Coal India only and does not include the results of its subsidiaries that provide the company bulk of the profits and its turnover. Hence we will provide detailed result analysis once the company declares its consolidated results.

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