Coal India: higher operating profits boost profitability

Backed by higher margins and marginal growth in the sales Coal India reported 35 % growth in net profits at Rs 5,413.9 crore for the quarter ended March 2013.

This was far ahead of analysts expectations who were looking at net profit growth in the region of about 5-6%.

Surprisingly the gains in profitability came on account of lower cost leasing to substantial improvements in the operating profits. During the quarter operating profits grew at 60.7 % at Rs 6,120 crore, which was ahead of estimates.

This was possible as total expenses fell by 11 % leading to significant improvement in the operating margins. Operating margins as a percent of sales came at 30.7 % as against 19.61 % in the corresponding quarter last year.