Coal India results today: Here is what to expect from Q4 earnings

Coal India share price traded almost flat on Thursday ahead of Q4 results to be declared today. Coal India share price however has risen more than 92% in a year.  The strong production numbers having been reported by Coal India have supported the confidence of investors. 

Strong Volume growth

COAL dispatches grew 7.7% year-on-year to 202 million tonne in 4QFY24. The strong demand from the power sector while has been driving sales, coal India too has been meeting the demand with rising production. 

Coal India FY24 production at 703.2 million tonne grew 10% as sales at 694.7 million tonne grew 8.5% year-on-year.\

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FY25 has started on a strong note with Coal India production at 61.8 million tonne rising 7.3% year-on-year. Sales volume at 64.3 million tonne outpaced production and despite high base of 62.3 mt could rise 3.2% year-on-year.

The rising production volumes are positive for sales growth in the open market too after having met demand under Fuel supply agreements to the power sector. The e-auction are  more profitable. 

E-auction premiums and Q4 expectations

The e-auction premium for Coal India had stood at 117% in 3QFY24, though may have come down with the international coal prices and rising supplies nevertheless they are still expected to be healthy (around 53%) in 4QFY24 and around 90% for FY24 as per estimates of analysts at Motilal Oswal Financial Services. 

The Blended realizations are expected to come at Rs1,64 per ton in 4QFY24, reflecting the price increase taken for high-grade coal from end-May 2023, said analysts at Kotak Institutional Equities.

Better blended realizations and healthy growth in dispatches to 202 million tons (up 8% year on year) in 4QFY24 is thereby expected to lead net profit at ₹5527.6 crore rise 37% year-on-year as pet Kotak estimates.  Analysts at Motilal Oswal also expect net profit at close to ₹5500 Crore during Q4 FY24

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Earnings however are not comparable with the same quarter last year due to the provision of ₹5800 Crore taken in 4QFY23 on account of wage revision, highlighted analysts.

Factors to watchout for

Meanwhile analysts remain watchful on management's guidance on output moving forward, and trajectory of e- auction volumes, and premium that remain important for Coal India's profitability growth in the near term.

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