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Coal India: No Signs of Earnings Upside - Views on News from Equitymaster
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Coal India: No Signs of Earnings Upside
Jun 9, 2017

Coal India has announced the fourth quarter results of financial year 2016-2017 (4QFY17). The topline increased by 8.3% YoY, while the bottomline declined by 38.2% YoY during the quarter.

Performance summary:
  • Income from operations increased by 8.3% YoY during 4QFY17. This is on the back of higher e-auction volumes. CIL reported sales volumes of 149.5 million tonne (MT) (up 4% YoY). The Fuel Supply Agreement (FSA) volume during the quarter came in at 116.3 MT (down 2.5% YoY). The FSA realisation was at Rs1,375/tonne (up 2% YoY). E-auction volumes came in at 29.5 MT (up 44.6% YoY). E-auction realisation was down by 2% YoY to Rs 1612/tonne.
  • Operating profit declined by 39.2% YoY. Similarly, operating margins contracted by 11.7%. This is on the back of higher provision higher provisions for wages pending negotiation and a one-off provision for grade slippage claims.
  • Other income and depreciation increased by 4.8% YoY and 4.9% YoY respectively. Interest cost declined by 3.5% YoY during the quarter.
  • Net profit plunged by 38.2%YoY during 4QFY17 on the back fall in operating profit.
  • The company declared a dividend of Rs 19.9 per share for FY17 (dividend yield of ~ 7.5%).

    Financial Snapshot
    (Rs m) 4QFY16 4QFY17 Change FY16 FY17 Change
    Net Sales 207,287 224,239 8.2% 755,183 754,666 -0.1%
    Other operating income 6,716 7,477 11.3% 24,893 27,540 10.6%
    Total Income 214,003 231,716 8.3% 780,076 782,206 0.3%
    Total Expenses 158,319 197,840 25.0% 592,964 659,807 11.3%
    Operating profit (EBITDA) 55,684 33,876 -39.2% 187,113 122,399 -34.6%
    Operating profit margin (%) 26.9% 15.1%   24.8% 16.2%  
    Other income 17,708 18,558 4.8% 59,406 55,156 -7.2%
    Interest 1,192 1,151 -3.5% 3,862 4,117 6.6%
    Depreciation 8,100 8,498 4.9% 28,259 29,101 3.0%
    Profit before tax & exceptional items 64,099 42,784 -33.3% 214,398 144,337 -32.7%
    Tax 20,104 15,606 -22.4% 71,719 51,660 -28.0%
    Net Profit 43,995 27,179 -38.2% 142,679 92,678 -35.0%
    Net profit margin (%) 21.2% 12.1%   18.9% 12.3%  
    No. of shares (m)         6,207  
    Basic diluted earnings per share (Rs) ^         14.9  
    P/E ratio (x) *         17.5  

    * On trailing 12 month basis

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Oct 23, 2017 (Close)

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