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UBS Investment Research
Coal India
D ividend possible cue to consolidated PAT
Event: FY11 standalone results; SA entity merely a holding company
FY11 standalone (SA) PAT came in at Rs46.9bn (+24.2% YoY) comprising
mainly of other income: other income was Rs50.84bn (+21.2% YoY) including
dividend income from its subsidiaries of Rs42.37bn (+25.8% yoy) and interest
income. EBITDA was -Rs1.35bn (-Rs0.59bn in FY10). Net sales were Rs4.1bn
(+4% YoY). The SA entity is a holding company as production is mainly carried
out by the subsidiaries of Coal India (CIL). The SA entity sold just 1.1mt of coal
in FY11.
Impact: dividend declared could provide a cue to consolidated profit
CIL declared FY11 dividend of Rs3.9/share (interim dividend was Rs3.5/share). If
we assume the same dividend payout ratio as last year (22.5% in FY10), implied
FY11 consolidated EPS would be Rs17.35/share (5% below our Rs18.16 estimate).
We believe this could be driven by lower-than-expected sales volume in FY11
(approximately 422mt, compared to our estimate of 428mt). However, we
highlight that CIL’s dividend payout ratio has historically been volatile
(36%/40%/42% in FY07/FY08/FY09).
Action: wait for consolidated numbers to be released on 25 May
As SA numbers mainly comprise other income, we need to wait until 25 May when
CIL will announce the consolidated results. As highlighted in our note Coal India:
Potential inventory monetisation in FY12, dated 9 May 2011, there could be upside
risk to our estimates if higher wagon availability continues and if CIL takes price
hikes along with wage revisions.
Valuation: maintain Buy rating and price target of Rs435.00
We continue to value CIL on 16.5x FY13E EPS and maintain our price target.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Coal India
D ividend possible cue to consolidated PAT
Event: FY11 standalone results; SA entity merely a holding company
FY11 standalone (SA) PAT came in at Rs46.9bn (+24.2% YoY) comprising
mainly of other income: other income was Rs50.84bn (+21.2% YoY) including
dividend income from its subsidiaries of Rs42.37bn (+25.8% yoy) and interest
income. EBITDA was -Rs1.35bn (-Rs0.59bn in FY10). Net sales were Rs4.1bn
(+4% YoY). The SA entity is a holding company as production is mainly carried
out by the subsidiaries of Coal India (CIL). The SA entity sold just 1.1mt of coal
in FY11.
Impact: dividend declared could provide a cue to consolidated profit
CIL declared FY11 dividend of Rs3.9/share (interim dividend was Rs3.5/share). If
we assume the same dividend payout ratio as last year (22.5% in FY10), implied
FY11 consolidated EPS would be Rs17.35/share (5% below our Rs18.16 estimate).
We believe this could be driven by lower-than-expected sales volume in FY11
(approximately 422mt, compared to our estimate of 428mt). However, we
highlight that CIL’s dividend payout ratio has historically been volatile
(36%/40%/42% in FY07/FY08/FY09).
Action: wait for consolidated numbers to be released on 25 May
As SA numbers mainly comprise other income, we need to wait until 25 May when
CIL will announce the consolidated results. As highlighted in our note Coal India:
Potential inventory monetisation in FY12, dated 9 May 2011, there could be upside
risk to our estimates if higher wagon availability continues and if CIL takes price
hikes along with wage revisions.
Valuation: maintain Buy rating and price target of Rs435.00
We continue to value CIL on 16.5x FY13E EPS and maintain our price target.
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