Coal India Management Meet Update; Dispatches a real problem; Wage hike unlikely; Emkay

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Coal India

Dispatches a real problem; Wage hike unlikely

NOT RATED

CMP: Rs 370                                       Target Price: NA

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n     Production – guiding for 452/470 mn MT/ in FY12E/13E (growth of 4-5%) and expect normalcy in growth (6-7%) to return in FY14E

n     Dispatches – remains a real problem as inventory stands at about 71mn MT.

n     Wage Hike – Due in July, might take significant time to finalize (last time it took 2.5 years), extent is not likely to be lower than 24% (last hike), in any case provision to be made

n     Trading at 15xFY13E consensus earnings (Rs25/Share). Possible negative triggers (higher wage hike, no price hike), positive triggers (scope of 100mn MT being sold at significantly higher prices, better railway rakes availability)