No immediate respite for Coal India investors

Despite rising e-auction realisations, concerns on costs and realisations continue

Coal India (CIL) has been in the news for its better e-auction prices in June, recommendations of the NITI Aayog on free pricing, and a proposal to restructure the company. Amid some positives, the company’s near-term prospects look subdued on realisation and cost worries.

The higher e-auction realisation in June is certainly positive for profitability. E-auction realisations had fallen sharply earlier this year when demand suffered, but have been recovering in the past couple of months. However, the bigger concern for analysts is the rising share of supplies under fuel supply agreements (FSAs), which are less remunerative, and realisations suffering