Coalindia vs Grasim Q2 FY24

Coal India reported a solid H1 FY24 with production up 12% YoY and offtake up 9% YoY, driven by robust power demand (33% growth in October). Management reiterated the FY24 production target of 780 million tons and FY25 target of 851 million tons, supported by improving evacuation infrastructure and MDO ramp-up. E-auction premiums remain strong at 90% over notified price, though management sees no near-term FSA price hike for the power sector. The company is on track to achieve 1 billion tons by FY27, contingent on demand. Key risks include land acquisition delays (e.g., MCL's Basundhara stoppage) and railway rake shortages in SECL and MCL, which could constrain dispatches.

Guidance read

FY24 production target of 780 million tons: Management confirmed the annual production target of 780 million tons for FY24, with H1 production up 12% YoY. FY25 production target of 851 million tons: Management guided for FY25 production of 851 million tons, implying ~9% YoY growth. E-auction volume at 15% of production in H2: Management expects e-auction volumes to be 15% of production in H2 FY24. MDO production to reach 55-60 million tons by FY26: MDO projects are expected to contribute 20-25 million tons in FY25 and 55-60 million tons in FY26.

Risk read

Key risks include Land acquisition delays at MCL — MCL's Basundhara coal field faced a 26-day stoppage due to land compensation disputes, impacting production.; Railway rake shortages in SECL and MCL — Management acknowledged daily rake shortages of 5 rakes in SECL and MCL, constraining dispatches.; E-auction premium volatility — E-auction premiums have been volatile, ranging from 50-60% to 90%, dependent on demand and import prices.; No near-term FSA price hike for power sector — Management ruled out any FSA price hike for the power sector in the next 7-8 months, limiting revenue growth..

Promise ledger

Scorecard data is being built as historical quarters are processed.

Grasim's Q2 FY24 consolidated revenue grew 10% YoY to INR 30,221 crore, with EBITDA up 14% to INR 4,509 crore, driven by cement and financial services. Standalone revenue rose 4% to INR 6,442 crore, while EBITDA jumped 21% to INR 1,354 crore on higher VSF volumes (+24% YoY) and lower input costs. However, global price weakness in viscose and chloralkali persisted, and new businesses (paints, B2B e-commerce) incurred initial losses. Management guided for paints commercial launch in Q4 FY24 with three plants operational, and B2B platform Birla Pivot nearing INR 100 crore monthly run rate. Risks include sustained global demand softness in textiles and chemicals, and potential margin pressure from volatile input costs.

Guidance read

Paints commercial launch in Q4 FY24: Three plants (Panipat, Ludhiana, Cheyyar) have received consent to operate and will be operational in Q4 FY24, with product launch in the same quarter. Epoxy capacity expansion commissioning in Q3 FY24: The expanded epoxy capacity is under commissioning and expected to be operational in Q3 FY24. Renewables capacity of ~1 GW to be commissioned by Q1 FY25: Projects under implementation of about 1 GW are expected to be commissioned by next year's first quarter. Debt-to-EBITDA not to exceed ~3.5x: Even with full paints CapEx next fiscal, debt-to-EBITDA is not expected to cross about 3.5x.

Risk read

Key risks include Sustained global textile demand weakness — International brands continue to hold elevated inventories, suppressing demand for VSF and VFY; recovery timeline remains uncertain.; Volatile input costs — Caustic soda, sulfur, coal, and oil prices are volatile; recent stabilization and upticks could pressure margins.; Paints business profitability impact — Initial costs from paints business are being charged to P&L, with losses expected to persist until commercial launch and scale-up.; VFY pricing pressure from Chinese imports — Anti-dumping duty on VFY is only at DGTR recommendation stage; Chinese imports continue to pressure domestic prices due to low domestic consumption in China..

Promise ledger

Of 1 tracked promise, management 0 met, 0 close, 1 missed.