No respite for Coal India in Q1

Continued wage provisioning pulled down profitability

Coal India’s June quarter (Q1) performance missed the Street’s expectations, mainly due to lower-than-expected realisations. Given the disappointing numbers and muted expectations on volumes, analysts are likely to lower their earnings estimates.

In Q1, while coal supplies under fuel supply agreements (FSA) were estimated to increase two per cent year-on-year (y-o-y) to 110 million tonnes (mt), the actual number remained flat at 107.14 mt, because of weak demand from power sector customers. Per tonne FSA realisation at Rs 1,201 was also disappointing.

Analysts had expected FSA realisations to decline about two per cent y-o-y to Rs 1,215 levels on the