Coalindia vs Maruti 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.

Maruti Suzuki reported a strong Q2 FY24 with record quarterly sales volume of 552,055 units, net sales of INR 35,535 crore (up 24.5% YoY), and net profit of INR 3,716 crore (up 80% YoY). The company gained 120 bps market share in PVs and achieved leadership in the SUV segment with ~23% share. Growth was driven by easing semiconductor shortages, favorable commodity prices (especially precious metals), cost reduction efforts, and a richer product mix. Management remains cautiously optimistic on demand, with festive season industry growth of ~18% so far. However, the small car segment continues to weaken due to affordability issues, and pending orders have reduced to ~250,000 units. Key risk: rising steel prices could pressure margins in H2.

Guidance read

Exports target of 750,000-800,000 units by FY2031: Management plans a threefold increase in export volumes from current levels to about 750,000-800,000 units by 2030-31. FY24 CapEx above INR 8,000 crore: Capital expenditure for the current fiscal year is expected to exceed INR 8,000 crore. Market share recovery to 50%: Management expressed commitment to gradually recover market share to the 50% mark over time.

Risk read

Key risks include Rising steel prices may pressure margins — Steel prices have started increasing, which could negatively impact gross margins in Q3 and beyond.; Small car segment weakness persists — Affordability issues continue to depress small car demand, which remains a significant portion of Maruti's portfolio.; Margin sustainability questioned by analysts — Analysts raised concerns about one-off gains and inventory adjustments boosting margins; management clarified no one-offs but acknowledged exceptional quarter with all positives aligning.; Capacity fungibility constraints — Shifting production mix towards SUVs may require investments in flexibility, potentially impacting near-term volumes and margins..

Promise ledger

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