Coal India Ltd (CIL) is set to announce its fourth-quarter earnings on Sunday. While the State-owned miner is likely to report double-digit growth in turnover, the profitability and margins are likely to come under pressure on the back of wage hikes.
On Friday, the company’s stock closed at ₹237.35, down by 0.06 per cent on the BSE.
Coal India had earlier announced the production and offtake data for the financial year 2022-23. It registered a nearly 13 per cent rise in production at around 703.2 million tonne (mt) during FY23, as compared with 622.6 mt in FY22.
The company’s over burden removal (OBR) rose to a new record of 1,651.7 million cubic metre (M.Cu.M) as of March 30, registering over 101 per cent of the target achievement. The previous high was 1,362 M.Cu.M and the growth was nearly 22 per cent over a similar period of FY22.
Brokerage houses expect CIL’s consolidated turnover to increase by nearly 15-18 per cent on a year-on-year basis at around ₹38,600 crore during the quarter that ended March 31, 2023, driven by higher offtake.
However, the e-auction premium is likely to be lower during the quarter at around 180 per cent over the FSA price as compared to around 241 per cent over FSA during Q3 FY23.
The profitability and margin could come under pressure due to higher employee expenses on account of an increase in provision towards wage hike, sources said.
CIL registered a near 69 per cent rise in net profit during the third quarter ended December 31, 2022, on the back of higher realisation, particularly from sales under the e-auction platform.
Net profit had increased to ₹7,719 crore during the quarter ended December 31, 2022, as compared with ₹4,557 crore same period last year.
The steep rise in profit came on the back of a higher add-on over the notified price in the e-auction sale of 14.65 mt of coal during the quarter under review.