Coal India Q2 numbers meet estimates, profit rises 8 times

New Delhi: Coal India's Q2 reports are out and showcase an impressive performance by the world's largest coal miner. In the June quarter of the current fiscal, Coal India Ltd (CIL) met estimates and its net profit rose over eight-fold year-on-year to Rs 3,084.7 crore, driven by its operating margin and higher volume.

The profits compare with the Rs 3,137-crore consensus estimate of analysts polled by Bloomberg.

For the future, the outlook on offtake (or sales volume) looks upbeat. So far this fiscal year (April to October), offtake has increased 7.4 percent over the year-ago period. For perspective, offtake had increased by 6.8 percent in FY18.

Revenue in the July-September period rose 22.3 percent to Rs 22,198.1 crore, compared to the same period last year. Due to expansion in the rail network and demand recovery, the company was able to achieve its "aggressive" annual sales volume target of 680 million tonnes. The PSU also saw an 8.1-percent increase in its volumes to 290.8 million tonnes, year-on-year.

Operating performance surpassed analyst estimates with earnings before interest, tax, depreciation and amortisation rising over five times to Rs 4,716 crore, compared with the estimated Rs 4,529 crore. Operating margin expanded 1,650 basis points to 21.3. percent.

For the future, the outlook on offtake (or sales volume) looks upbeat. So far this fiscal year (April to October), offtake has increased 7.4 percent over the year-ago period. For perspective, offtake had increased by 6.8 percent in FY18.

Coal scarcity is one of the major problems facing the power and the non-power sector in India. Analysts expect power plants to continue restocking, which would support volume growth. What's more, e-auction prices are likely to remain stronger even as volumes could be under pressure.