Coal India Q1 Results Review - Good Show; Expect Estimate Upgrades: ICICI Securities

ICICI Securities Report

Coal India Ltd.’s performance was significantly ahead of consensus estimates. Key points:

1. Profit after tax was up 4% YoY (26% QoQ), at Rs 109.4 billion.

2. Manpower cost was 6% lower compared to our estimates.

3. Cost/tonne was significantly lower compared to the past at Rs 1,115/tonne.

4. Q1 FY25 capex was at Rs 33.3 billion, up 3% YoY.

5. Coal India is the preferred bidder for Khattali Chotti graphite block.

Going ahead, we believe that higher volumes to non-regulated sector and efficient cost control are likely to be the main earnings drivers. Taking cognizance of Coal India’s Q1 FY25 performance and lower manpower cost, we raise our FY25E/FY26E earnings per share by 17%/15%, resulting in a revised target price of Rs 565 (earlier Rs 495) on an unchanged 7.5 times FY26E EPS. Maintain Add.

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