Coal India Q2 Review - Revenue Inline; Earnings Hit By Weak E-auction Volumes, High Costs: Motilal Oswal

Motilal Oswal Report

Coal India Ltd.'s Q2 FY25 revenue stood at Rs 307 billion (-6% YoY/-16% QoQ), in line with our estimate of Rs 317 billion. Blended average selling price stood at Rs 1,622/tonne (-6% YoY and -3% QoQ), 8% below our estimate.

Adjusted Ebitda (excluding over burden removal costs) stood at Rs 72 billion (-20% YoY/-38% QoQ), below our estimate of Rs 99 billion due to lower-than-expected e-auction volumes and elevated costs. Adjusted Ebitda/tonne stood at Rs 426/tonne (-17% YoY/-27% QoQ) versus our estimate of Rs 595/tonne.

Adjusted profit after tax came in at Rs 63 billion (-22% YoY/-43% QoQ), below our estimate of Rs 81 billion due to weak operating performance and lower other income. In H1 FY25, revenue declined 2% YoY, while adjusted Ebitda and adjusted profit after tax fell by 7% YoY.

Q2 production stood at 152 mt (-3% YoY/-20% QoQ) as heavy monsoons affected mining operations. Sales volume stood at 168 mt (-3% YoY/-15% QoQ). Fuel supply agreement realization stood at Rs 1,462/tonne, down 5% YoY and 4% QoQ, with FSA volume of 148 mt (-4% YoY/-14% QoQ).

E-auction volume stood at 15 mt (-5% YoY/-35% QoQ) with an e-auction premium of 69% versus 58% in Q1 FY25.

Coal India declared an interim dividend of Rs 15.75 per share in Q2.

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