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New pricing system: 17 categories instead of 7
The earlier system of “A to G” grades has been changed to 17 GCV based bands. There
is an additional price increase of 6% for ECL. At this stage, we do not have the
management inputs on: (i) mapping of old grades to new grades, (ii) averages prices of
old grades (though ranges are available) and (iii) the grade‐wise volume break‐ up
separately for power and non‐power consumers.
Power consumers: Estimated blended price increase of ~2%
Power consumers in India consume largely E and F grade coal. Revised prices for grade
E coal are largely flat but those for F grade are lower by over 10% as per our
estimates. For grade A, the price increase is estimated at ~9% while for C and D, the
hike could be over 40%. We estimate no price increase for B grade. We estimate the
blended increase in coal prices for power consumers at ~2%.
Non‐power consumers: Estimated blended price hike at ~19%
Non‐power consumers would face similar (like power consumers) price hikes for grades
A to D though for C and D, the increase will be higher. However, for grades E to F, while
power consumers would see flat or declining prices, non‐power consumers would see
an increase of 10% to 12%. Overall, we estimate the blended increase in coal prices for
non‐power consumers at ~19%.
Blended price increase for CIL estimated at ~7‐8% going forward
This could boost our FY13 EBITDA and EPS by ~17% and ~14% respectively.
Revised pricing to beneficially impact FY13 estimates
Our current price hike assumption for FY13 is ~4.5%. Revised pricing is likely to have an
upside impact on our FY13 estimates. Pending clarity, we maintain our forward
estimates and our BUY/SO recommendation with a TP of INR430/share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
New pricing system: 17 categories instead of 7
The earlier system of “A to G” grades has been changed to 17 GCV based bands. There
is an additional price increase of 6% for ECL. At this stage, we do not have the
management inputs on: (i) mapping of old grades to new grades, (ii) averages prices of
old grades (though ranges are available) and (iii) the grade‐wise volume break‐ up
separately for power and non‐power consumers.
Power consumers: Estimated blended price increase of ~2%
Power consumers in India consume largely E and F grade coal. Revised prices for grade
E coal are largely flat but those for F grade are lower by over 10% as per our
estimates. For grade A, the price increase is estimated at ~9% while for C and D, the
hike could be over 40%. We estimate no price increase for B grade. We estimate the
blended increase in coal prices for power consumers at ~2%.
Non‐power consumers: Estimated blended price hike at ~19%
Non‐power consumers would face similar (like power consumers) price hikes for grades
A to D though for C and D, the increase will be higher. However, for grades E to F, while
power consumers would see flat or declining prices, non‐power consumers would see
an increase of 10% to 12%. Overall, we estimate the blended increase in coal prices for
non‐power consumers at ~19%.
Blended price increase for CIL estimated at ~7‐8% going forward
This could boost our FY13 EBITDA and EPS by ~17% and ~14% respectively.
Revised pricing to beneficially impact FY13 estimates
Our current price hike assumption for FY13 is ~4.5%. Revised pricing is likely to have an
upside impact on our FY13 estimates. Pending clarity, we maintain our forward
estimates and our BUY/SO recommendation with a TP of INR430/share.
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