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Coal India to divert e-quota during October 2011
According to the Coal India management, the company will divert 4mn tonnes of monthly
quota meant for e-auction to power generation utilities during October 2011. The
company informed that it had already increased daily supplies to the power sector by
nearly 0.16mn tonnes and it aims to increase the daily production to 1.3mn tonnes from
the existing 1.1mn tonnes. Given the rising coal shortage in the country, there is a
possibility that e-auction coal could be diverted to power producers at FSA (Fuel supply
agreement) rates. This could potentially lower its FY2012 and FY2013 EPS by 8% and
10%, respectively, as per our estimates. Coal India sells ~10% of its coal through eauction
at ~80-120% premium over FSA rates. However at current valuations we
recommend Accumulate on the stock with a target price of `358.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Coal India to divert e-quota during October 2011
According to the Coal India management, the company will divert 4mn tonnes of monthly
quota meant for e-auction to power generation utilities during October 2011. The
company informed that it had already increased daily supplies to the power sector by
nearly 0.16mn tonnes and it aims to increase the daily production to 1.3mn tonnes from
the existing 1.1mn tonnes. Given the rising coal shortage in the country, there is a
possibility that e-auction coal could be diverted to power producers at FSA (Fuel supply
agreement) rates. This could potentially lower its FY2012 and FY2013 EPS by 8% and
10%, respectively, as per our estimates. Coal India sells ~10% of its coal through eauction
at ~80-120% premium over FSA rates. However at current valuations we
recommend Accumulate on the stock with a target price of `358.
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