Coal India share price down over 2% as Q4 net profit falls 18% YoY
2 min read 08 May 2023, 09:23 AM ISTCoal India share price falls over 2% as Q4 net profit declines 18% year-on-year.
PremiumShares of Coal India fell over 2% on Monday's early trade following its Q4FY23 earnings. The consolidated net profit for the quarter ended March slumped 18% on year to ₹5,528 crore from ₹6,715 in Q4FY22.
Despite making a provision in the accounts for ₹8,153 crores to cover wage revisions for company's non-executive staff in 2022–2023, this happened according to the company.
Coal India reported a remarkable 62% increase in profit after tax for FY23, coming in at ₹28,125 crore as compared to ₹17,378 crore for FY22.
On Friday, shares of the company ended flat at ₹237.35 apiece on BSE.
For the quarter ended March, the revenue from operations rose 17% year-on-year to ₹38,152 crore from ₹32, 709 crore in Q4FY22. The board of directors of the company have recommended a final dividend of ₹4 per share.
On Monday's trade, the shares of the company opened at ₹230.70 per share on BSE. As per the trendlyne data, shares of the company so far has gained 39.96% from 52-week low of ₹164.6 recorded on May 12, 2022.
The stock price rose 24.8% and underperformed its sector by 1.2% in the past year.
“We are seeing a gap down opening post its recent strong upmove, this profit booking can extend with next support around 221, the said levels would be an opportunity to buy whereas 240 is the immediate resistance," said Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One.
At 10:03 IST, shares of the company were trading 2.86% lower at ₹230.55 on BSE.
According to brokerage house, Kotak Institutional Equities, Coal India reported a 62% yoy increase in FY2023 PAT to ₹28,125 crore, which was aided by robust coal realisations from e-auctions held throughout the year. However, wage provisions had an influence on earnings during the Q4FY23. E-auction realisations reached their peak in Q2FY23 and have subsequently decreased by 25%, indicating the decline in the price of imported coal.
"We maintain 'reduce' rating with a revised fair value of Rs240/share ( ₹225/share earlier) as we moderate the decline in e-auction prices a bit," said the brokerage.
In its research, Nuvama Institutional Equities stated that the company's costs reached their highest point in FY23 due to the full funding of wage hikes.
"We factored in 742 mt (up 6.8% YoY) of sales volume in FY24, which provides benefits of operating leverage. We have already factored in lower e-auction prices ( ₹3,000/t in FY23 versus ₹4,500/t in Q4). Any rise in FSA coal price is an additional trigger. Retain ‘BUY/SO’," added the brokerage.
