Coal India - Q4FY20 Result Update - ICICI Securities

Coal India (CIL) reported a mixed set of Q4FY20 numbers. EBITDA came in higher than our estimate while reported PAT came in lower than our estimate. PAT came in lower than our estimate on the back of higher-than-expected effective tax rate. CIL reported sales volumes of 164 million tonne (MT), flattish YoY. Fuel supply agreement (FSA) sales volume was at 139.2 MT (142.4 MT in Q4FY19) while FSA realisation during the quarter was at Rs. 1446/tonne (Rs. 1460/tonne in Q4FY19). E-auction volumes were at 21.0 MT (16.7 MT in Q4FY19) while e-auction realisations were at Rs. 2106/tonne (Rs. 2754/tonne in Q4FY19). Total operating income was at Rs. 27568.2 crore (down 1.9% YoY), broadly in line with our estimate of Rs. 28001.7 crore. EBITDA came in at Rs. 6728.9 crore (down 21.9% YoY), higher than our estimate of Rs. 6416.9 crore. EBITDA margin was at 24.4% (down 440 bps YoY), higher than our estimate of 22.9%. Reported EBITDA/tonne was at Rs. 410/tonne, higher than our estimate of Rs. 391/tonne. Effective tax rate for the quarter was at 37.9%, higher than our estimate of 25.2%. Hence, PAT was at Rs. 4625.8 crore (down 16.2% YoY), lower than our estimate of 5351.6 crore.

Valuation & Outlook

CIL reported a mixed performance in Q4FY20. Going forward, we model sales volume of 550 MT for FY21E and 575 MT for FY22E. Furthermore, we expect EBITDA margins to hover at ~18% over the next couple of years. We value the stock at 5x FY22E adjusted EV/EBITDA and arrive at a target price of Rs. 150. We maintain our HOLD recommendation.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_CoalIndia_Q4FY20.pdf

Shares of COAL INDIA LTD. was last trading in BSE at Rs.133.9 as compared to the previous close of Rs. 132.5. The total number of shares traded during the day was 290779 in over 2398 trades.

The stock hit an intraday high of Rs. 134.55 and intraday low of 131.55. The net turnover during the day was Rs. 38803628.

Source : Equity Bulls

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