Stock Market Today: Coal India Share price gained 4% during intraday trades on Friday post Q4 results posted by the company after the market hours on Thursday.
Q4 earnings beat estimates
Coal India had reported consolidated net profit at ₹8,640.5 crore for the quarter ending March, which grew 25.8 percent YoY. The same came better than the consensus analyst estimate of ₹6,826 crores.
The same was helped by rise in earnings before interest tax depreciation and amortisation (Ebitda) that came in at ₹11,338 crores as per analysts calculations and better than consensus estimate of ₹10,132 crores. Ebitda margins stood at 30.3% for the quarter.
A better operating performance helped by fall in input cost and employee costs helped , leading to good growth in earnings despite tepid topline growth.
Revenue from operations for the quarter stood at ₹37,410 crores (versus consensus estimate of ₹36,909 crores) reporting a 3.5% growth from Q3FY24, though revenues were down 2% from Q4FY23
Strong volume performance-
Coal India production during Q4FY24 stood at 241.75 million tonnes of raw coal versus 224.16 million tonnes in the year ago quarter.
Coal offtake stood at 201.665 million tonne for the quarter versus 186.877 in the year ago quarter rising 8% y-o-y.
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Anlysts at Nuvama Institutional Equities sid that employee cost may normalise in FY25. They expect Coal India volumes to rise 5% CAGR (compound annual growth rate) on improving power demand over FY24–26. s they have marginally cut FY25 estimated Ebitda by 2% factoring in higher employee cost, they also have reduced target price to ₹537 for Coal India.
E-auction premiums soften sequentially but firm–
With the premiums sustaining at 65% levels, analyst at Emkay Global Finacil Services expect concerns around declining premiums alleviating to some extent, and see potential for upgrades to consensus earnings. They maintain their estimates for now, as they sense that the market would seek more clarity on accounting treatment from the management. Emkay target price stands at ₹550 piece for Coal India
E-auction volumes improved to 11% of total offtake in Q4FY24, recovering from the low of 8% in Q3FY24 (the target was to achieve 15%). In FY25, the e-auction volume target is set at above 15%. and higher e-auction volumes will partly offset the lower e-auction prices said anlysts at Axis Securities in their result review. Axis Securities has a Buy rating with target price of ₹505 for Coal India.
Analysts at Jefferies India Pvt Ltd in their first cut post results said that Coal India’s 4Q reported Ebitda and net profit grew 21-26% YoY, including the effect of changes in accounting policy for stripping activity (overburden removal) costs with retrospective effect from FY23.
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As per Jefferies stripping activity provision is being reversed and credited to P&L in a phased manner, the end-FY24 balance of provision yet to be reversed stood at around Rs61400 Crore . Jefferies have a Buy rating with target price of ₹590 a piece for Coal India.
