Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Coal India reported 1QFY12 EBITDA of Rs57.1bn (+61% yoy and -15% qoq), 7% higher than our
estimates. Though volumes were weak as expected, average realizations were strong. Maintain
Sell on expensive valuations.
Volumes soft; Strong realizations drive top-line
Net revenues were 145bn (+27% yoy and -3% qoq) driven by strong realizations of Rs1,365/t
(+21% yoy and +4% qoq). Despite the average 11% price increase taken in February,
realizations were 4% stronger than expected. Production was 96Mt (+1% yoy and -27% qoq)
slightly lower than our expectation of 99Mt. Production was impacted by the early arrival of
the monsoon in Eastern India particularly impacting the production of ECL (Eastern Coalfields
Limited), BCCL (Bharat Coking Coal Limited) and CCL (Central Coalfields Limited). Sales
volumes were in-line with our expectation at 106Mt (+5% yoy and -7% qoq).
EBITDA of Rs57.1bn (+61% yoy and -15% qoq)
Employee expenses was Rs48.7bn (+12% yoy and +6% qoq), a sharp sequential increase
despite the fact that provisions for wage hike come into effect only from July 1, impacting the
September quarter. Social overhead expenses declined 58% qoq and 37% yoy to Rs2.9bn.
Adj. EBITDA was Rs57.1bn (+61% yoy and -15% qoq), 7% higher than our estimate of
Rs53.1bn. Due to higher fixed costs, EBITDA/t declined 9% qoq to US$12/t.
Lower provisions and higher other income drive earnings
Overburden removal provisions continued for the quarter, though declining by 49% qoq to
Rs5.8bn. Other income came in at Rs15.6bn (+32% yoy and +33% qoq), well over our
estimate of Rs12.3bn. Lower provisions and higher other income drove PAT to Rs41.4bn
(+50% yoy and +5% qoq).
10Mt of inventory liquidated in 1Q
The company has been able to reduce inventory by 10Mt to 60Mt during 1Q due to better
rake availability. The company received 177.4 rakes in April, 162.1 rakes in May and 160.2
per day in June. However, we note that it requires 190 rakes per day in order to achieve its
targeted offtake of 454Mt for FY12F.
Valuations remain expensive, in our view
Coal India is currently trading at 19.4x FY12F earnings and 17.1x FY13F earnings (global
peer average at 12x and 9.9x). On an EV/EBITDA basis, it is trading at 10.4x FY12F EBITDA
and 8.7x FY13F EBITDA, (global peer average at 6.7x and 5.9x respectively) expensive
valuations in our view.
More details on the results will be available post the conference call on Thursday August
18th.
We have a Sell rating on the company with TP of Rs315.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Coal India reported 1QFY12 EBITDA of Rs57.1bn (+61% yoy and -15% qoq), 7% higher than our
estimates. Though volumes were weak as expected, average realizations were strong. Maintain
Sell on expensive valuations.
Volumes soft; Strong realizations drive top-line
Net revenues were 145bn (+27% yoy and -3% qoq) driven by strong realizations of Rs1,365/t
(+21% yoy and +4% qoq). Despite the average 11% price increase taken in February,
realizations were 4% stronger than expected. Production was 96Mt (+1% yoy and -27% qoq)
slightly lower than our expectation of 99Mt. Production was impacted by the early arrival of
the monsoon in Eastern India particularly impacting the production of ECL (Eastern Coalfields
Limited), BCCL (Bharat Coking Coal Limited) and CCL (Central Coalfields Limited). Sales
volumes were in-line with our expectation at 106Mt (+5% yoy and -7% qoq).
EBITDA of Rs57.1bn (+61% yoy and -15% qoq)
Employee expenses was Rs48.7bn (+12% yoy and +6% qoq), a sharp sequential increase
despite the fact that provisions for wage hike come into effect only from July 1, impacting the
September quarter. Social overhead expenses declined 58% qoq and 37% yoy to Rs2.9bn.
Adj. EBITDA was Rs57.1bn (+61% yoy and -15% qoq), 7% higher than our estimate of
Rs53.1bn. Due to higher fixed costs, EBITDA/t declined 9% qoq to US$12/t.
Lower provisions and higher other income drive earnings
Overburden removal provisions continued for the quarter, though declining by 49% qoq to
Rs5.8bn. Other income came in at Rs15.6bn (+32% yoy and +33% qoq), well over our
estimate of Rs12.3bn. Lower provisions and higher other income drove PAT to Rs41.4bn
(+50% yoy and +5% qoq).
10Mt of inventory liquidated in 1Q
The company has been able to reduce inventory by 10Mt to 60Mt during 1Q due to better
rake availability. The company received 177.4 rakes in April, 162.1 rakes in May and 160.2
per day in June. However, we note that it requires 190 rakes per day in order to achieve its
targeted offtake of 454Mt for FY12F.
Valuations remain expensive, in our view
Coal India is currently trading at 19.4x FY12F earnings and 17.1x FY13F earnings (global
peer average at 12x and 9.9x). On an EV/EBITDA basis, it is trading at 10.4x FY12F EBITDA
and 8.7x FY13F EBITDA, (global peer average at 6.7x and 5.9x respectively) expensive
valuations in our view.
More details on the results will be available post the conference call on Thursday August
18th.
We have a Sell rating on the company with TP of Rs315.
No comments:
Post a Comment