Coal India — 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).
bullish
high
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
75%Questions answered1Evaded / deflected12Questions audited
Answered
High priority
Why is MCL volume flat YTD and what is the outlook?
Asked by Amit Dixit, ICICI Securities
Management explained the land issue and reaffirmed the target, directly addressing the concern.
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Question
if I look at the subsidiary wide volume for this year, so until October, what we have seen that MCL's volumes have remained quite flat... So have we hit a plateau or something, or what kind of long-term growth plans you have for this subsidiary?
P. M. Prasad, Chairman and Managing Director
in MCL, there was a land issue in one of the fields, Basundhara Coal Field. From July 2 to almost July 27, almost 26 days, that field was stopped by villagers... Team MCL and Team Coal India is quite sure that target of 204 million will be assured.
Answered
High priority
What is the targeted e-auction volume for H2 and current premium?
Asked by Amit Dixit, ICICI Securities
Management gave a clear percentage for volume and a specific premium figure.
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Question
What is our targeted e-auction volume for the second half of the year? And if you could highlight, the latest e-auction premium over notified price that is currently going on on an average.
P. M. Prasad, Chairman and Managing Director
15% of production, you can say, roughly. ... It is percentage of premium over 90 notified price, it is 90% at overall, as a Coal India as a whole.
Partial answer
High priority
How do you see e-auction premium moving ahead?
Asked by Alok Deora, Motilal Oswal
Management acknowledged the question but gave no quantitative forecast, only qualitative factors.
no specific guidancedepends on external factors
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Question
on the e-auction premium, which you mentioned about 90%, it has been little volatile... So how do we see the e-auction premium moving ahead for this financial year?
P. M. Prasad, Chairman and Managing Director
right now it is moving ahead quite well, but it depends on many factors. One is the demand, number two is other international prices, markets, import quantities.
Answered
High priority
What is driving improved profitability besides e-auction?
Asked by Digant Haria, GreenEdge Wealth
Management provided specific cost savings and a metric (cost per ton decrease).
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Question
the improved profitability that we are seeing over last four, five quarters is not because of abnormal profits on e-auction, but it is because of efficiency... So if you can just elaborate more, that is this efficiency just coming out of the lower employee costs, or is our mining operation getting more and more efficient?
P. M. Prasad, Chairman and Managing Director
In the case of explosives and diesel, we are incurring less cost compared to previous year. ... cost per ton, there is no much increase, rather it is decrease of 1%, cost per ton produced.
Evasive
Medium priority
What is the capital infusion plan for solar subsidiaries?
Asked by Karthik Jain, Whitestone Financial Advisors
Management gave total CapEx but avoided specifying the solar subsidiary allocation.
no specific number for subsidiariesdeferred to phased manner
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Question
we have two subsidiaries, CIL Solar PV Limited and CIL Navikarniya Urja Limited. So how much capital are we planning to infuse in these subsidiaries over the next 2-3 years? And what are our CapEx plans there?
P. M. Prasad, Chairman and Managing Director
CapEx as a whole, Coal India, it is INR 16,500 crore. But with these two subsidiaries, since in the last 3 years only we have started this solar, we will be going in a phased manner.
Partial answer
High priority
What is the realistic volume target for FY24 given YTD growth?
Asked by Ashish Kejriwal, Nuvama Wealth Management
Management restated the target but did not provide a revised realistic estimate or address the gap.
reiterated target without addressing feasibilityblamed rainy season
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Question
You have mentioned about volume target, which is something like 12% YOY growth. ... YTD, we have seen offtake increasing by just 9.5%. ... what could be our realistic volume target for this year?
P. M. Prasad, Chairman and Managing Director
Volume target-wise, target is 780 million tons coal production, 780 million tons, dispatch also we are supposed to do. ... we will be achieving our dispatches target also.
Answered
High priority
What is the expected employee cost for this year?
Asked by Ashish Kejriwal, Nuvama Wealth Management
Management provided a specific number (INR 46,000 crore).
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Question
is it possible to guide us on the total employee cost which one can expect this year?
P. M. Prasad, Chairman and Managing Director
Employee cost about basically 46- ... INR 46,000 crore.
Answered
High priority
Which subsidiaries need evacuation capacity increase for FY25 target?
Asked by Kirtan Mehta, CFA, BOB Capital Markets
Management identified specific subsidiaries and quantified the need.
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Question
If we look at the 840 million ton production target for next year and the current evacuation capacity, where are the one subsidiaries where we will need capacity, evacuation capacity increase to deliver on the next year's target?
P. M. Prasad, Chairman and Managing Director
Primarily it is the MCL and SECL. In SECL also, we are focusing on both the field, at least there is a need for an increase of 40-50 rakes.
Partial answer
Medium priority
What is the production run rate from MDO operations?
Asked by Kirtan Mehta, CFA, BOB Capital Markets
Management gave future projections but did not provide the current run rate as asked.
no current run rate givenonly future estimates
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Question
we have started production at 3 projects at this point of time. So what is the production run rate that we are achieving? And what will be the exit rate from the MDO production by the end of this year and the next year?
P. M. Prasad, Chairman and Managing Director
an incremental from this MDOs in 2024-2025, maybe about 20-25 million. But 2025-2026, but for sure it will be around 60 million, 55-60 million.
Answered
High priority
What is the split of H1 dispatches between power and non-power?
Asked by Bharanidhar Vijayakumar, Spark Capital
Management provided exact numbers for total and split.
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Question
I just want to know the split of the dispatches in first half of FY 24 between power sector and non-power sector.
P. M. Prasad, Chairman and Managing Director
Total, our H1 offtake is 360 million ton, 360.66. Power sector is 295.36, around 80%. 60 million has gone to non-power.
Answered
High priority
Do you expect an FSA price hike soon?
Asked by Amit Dixit, ICICI Securities
Management gave a clear timeline (no hike in next 7-8 months).
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Question
do we expect to get some additional FSA price hike anytime soon?
P. M. Prasad, Chairman and Managing Director
Exactly not right now. It is near future, we are not seeing anything up to the next 7-8 months.
Partial answer
High priority
What is the total CapEx required to reach 1 billion ton target?
Asked by Ashish Kejriwal, Nuvama Wealth Management
Management provided some numbers but did not give a single ballpark figure for the entire target.
gave annual figures but not total for 1BTsplit by project not aggregate
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Question
to reach to 1 billion ton target, how much CapEx is required, for our production, for our land acquisition, or for our evacuation facilities to reach to that target? Any ballpark figure will also do.
P. M. Prasad, Chairman and Managing Director
Every year, say, this year, INR 16,500 crore, next year maybe INR 18,000-INR 19,000 crore. ... INR 4,700 crore in this next five years. First Mile only.