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CIL to set aside Rs 750 cr every quarter

CIL to set aside Rs 750 cr every quarter
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First Published: Fri, Nov 11 2011. 10 58 PM IST

By Bloomberg
By Bloomberg
Updated: Fri, Nov 11 2011. 10 58 PM IST
Kolkata: State-owned Coal India Ltd (CIL) will set aside at least Rs 750 crore every three months, starting in the quarter ended 30 September, for potential pay increases for its non-executive workers, or those below the rank of officers.
By Bloomberg
The annual provision of Rs 3,000 crore that CIL’s board has currently approved indicates the firm is bracing for a minimum 20% pay hike for its 360,000 workers, said company officials who declined to be named.
CIL paid its non-executive workers around Rs 15,000 crore in the year ended 31 March, out of its total wage bill of Rs 18,200 crore, they said. CIL will announce its September quarter earnings on Saturday. A spokesperson for the company declined to comment.
CIL revises salaries every five years. In 2006, workers received a 24% pay raise, following 13 months of negotiation. CIL chairman N.C. Jha had earlier said he wanted to close negotiations this time within six months.
Negotiations began in July, and trade unions have demanded that workers’ wages be doubled at the least. “We are demanding a 100% pay hike because we want the widening gap between the remunerations of officers and workers reduced,” said Vivek Chowdhury, general secretary of the Colliery Mazdoor Sabha of India (CMSI). The union is backed by the Centre for Indian Trade Unions (Citu), the labour arm of the Communist Party of India (Marxist).
CIL’s best-paid executives receive 30 times the average salary of its non-executive workers, said Jibon Roy, general secretary of the All India Coal Workers’ Federation. “This disparity should immediately be cut to half at the least.”
Meanwhile, analysts expect CIL’s net profit in the July-September quarter to fall 39-49% from the preceding quarter, though it would be substantially higher compared with the same period last year because of a price increase in February. CIL in February raised prices by 10-15% across grades.
Analysts at Nomura Financial Advisory and Securities (India) Pvt. Ltd are estimating CIL’s profit to be 48.8% lower than the April-June quarter because floods-hit coal extraction. Kotak Institutional Equities estimates CIL’s net profit to be Rs 2,516 crore, 39% lower sequentially.
Compared with the previous year though, profit may rise 58.8%, according to Citigroup Global Markets, which pegs the sequential decline at 40.6%.
Analysts estimate CIL to have produced around 80 million tonnes (mt) of coal in the July-September quarter, compared with 96 mt in the preceding three months and 90 mt in the same period last year.
Kotak estimates CIL’s net sales to be at Rs 13,262.4 crore in the quarter ended September, 8.5% lower sequentially, but 19.6% higher year-on-year.
“Heavy rains surely pulled down Coal India’s sales during the September quarter, but because of the price rise in February, the earnings would be impressive compared with previous year,” said S.P. Tulsian, an independent stock market analyst.
One of the CIL officials cited above, however, said every year the firm’s performance is hit in the September quarter by the monsoon, but this year “the disruptions were of a much higher order”.
On Friday, Coal India’s shares ended little changed at Rs 326.30 on the Bombay Stock Exchange.
manish.b@livemint.com
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First Published: Fri, Nov 11 2011. 10 58 PM IST
More Topics: Coal India | Quarter | Funds | Workers | Salaries |