Coal India Ltd Q3 FY24 Earnings Conference Call Insights

Key highlights from Coal India Ltd (COALINDIA) Q3 FY24 Earnings Concall

• Nine-Month Financial/Operational Performance
  • Revenue from operations at INR 1,04,914 crores, up 5%.
  • Highest ever net sales, up 4%.
  • Highest ever PBT at INR 31,937 crores, up 5%.
  • Highest ever PAT at INR 23,849 crores.
  • Highest ever coal production at 531.90 million tonnes.
  • Capex at INR 5,702 crores.
  • On track to achieve target of INR 16,500 crores in FY 2023-24.
• Coal Production Target
  • Likely to achieve 770-780 million tonnes in FY24.
  • 5 subsidiaries ahead of targets, but SECL may have 8-9 million tonne shortfall.
  • Targeting 10%+ growth for next year at 838 million tonnes.
  • E-auction coal volumes were 13% of total in January 2023, increased to 17% by mid-February.
  • Expect to hit 15% target for second half of FY24.
  • Could reach 20% by March 2024 as production ramps up.
  • Coal India aiming for 1 billion tonne production level.
  • Demand expected to grow with 80,000 MW new power plants by 2030.
• CIL Financial Outlook
  • Strong profit and dividend payouts to continue.
  • Well placed to sustain momentum despite market uncertainties.
• Business Expansion Plans
  • Well prepared through advanced procurement and capacity building.
  • Investing in latest technologies for efficient, sustainable operations.
  • Confident of mitigating risks and uncertainties.
  • Participating in upcoming auction for 3 exploration blocks in India.
  • Also exploring opportunities in Australia currently.
• Capex Targets
  • INR 17,500 crores targeted for FY24 and FY25 that includes land acquisition, railway lines, and coal gasification projects.
  • Coal mine expansion funded through internal accruals.
  • Renewable energy and diversification may require some debt financing.
• Strike Impact
  • Marginal impact from one-day strike by some unions.
  • 80-95% production achieved during strike.
  • Strike related to national-level issues, not primarily Coal India.
• Coal Price Outlook
  • Expected to stabilize at current levels for next year or so.
  • Dependent on future events like hosting of Olympics, etc.
  • Internal estimates suggest stable trend in coal prices.
• Import Substitution
  • Around 50 million tonnes of coking coal imports likely to continue.
  • Some coastal power plants designed for imported coal may continue imports.
  • Target of 175-200 million tonnes of imported coal substitutable with domestic supply.
  • High-grade coal from Coal India mines offered to non-regulated sectors like cement.
• Washery Expansion
  • Madhuband washery commissioned recently, capacity 5000 TPD.
  • Two more washeries in BCCL under construction.
  • Plans to increase washed coking coal production from 1.5 MT to 6-7 MT by FY27.
  • 10 MT Lakhanpur non-coking coal washery commissioned.
  • Target of 8 MT washed coking coal by FY30.
• Coal Price Revision
  • No proposal currently to revise coal prices under Fuel Supply Agreements.
  • Last revision was an 8% increase for G1 to G10 grades in 2018.
• Outlook
  • Expected to increase to around INR 18,000-18,500 crores in FY26.
  • Capex likely to rise sharply initially during project start, then stabilize.
  • Optimistic about maintaining double-digit production and dispatch growth in FY24.
  • Efforts to make up for any shortfall from other subsidiaries.