ICICI Direct's research report on Coal India
Coal India (CIL) reported a healthy set of Q4FY19 numbers wherein topline, EBITDA and PAT came in notably higher than our estimate. Better-than-expected performance was primarily on the back of higher-than-expected fuel supply agreement (FSA) realisations. FSA realisation during the quarter was at Rs 1460/tonne (vs. Rs 1403/tonne in Q4FY18), higher than our estimate of Rs 1350/tonne. CIL reported sales volumes of 163.4 million tonne (MT) (up 6.1% QoQ, 2.4% YoY). The company reported a total operating income of Rs 28546.3 crore (up 7.5% YoY, 14.0% QoQ). EBITDA came in at Rs 8212.2 crore (up 21% QoQ), higher than our estimate of Rs 6524.8 crore. EBITDA margin was at 28.8% (up 170 bps QoQ), higher than our estimate of 23.6%. Reported EBITDA per tonne was at Rs 502.5/tonne (up 14.1% QoQ), higher than our estimate of Rs 399/tonne. Ensuing PAT came in at Rs 6024 crore (up 32% QoQ), higher than our estimate of Rs 4417.2 crore.
Outlook
Coal India reported a healthy performance for Q4FY19. Going forward, we expect CIL’s offtake volume to grow at a CAGR of 3.4% in FY19-21E while EBITDA margin to remain steady at ~23%. Going forward, we value the stock at 5.5x FY21E EV/EBITDA and arrive at a target price of Rs 275. We maintain our HOLD recommendation on the stock.
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