Categories Concall Highlights, Earnings, Energy

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.

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