Coal India’s (CIL) shipments rose 3% y-o-y to 51.5mt in February, 2019. Key highlights: (i) shipments of large subsidiaries—MCL and SECL—rose 2% and 4%, respectively; (ii) production grew 6.5% y-o-y to 58.1mt led by MCL and SECL; and (iii) pit-head inventory estimated at 35mt as of February end leading to improved coal availability. Going ahead, we expect: (a) CIL to report 4.5% y-o-y growth in shipments in FY19; and; (b) e-auction premium could dip given the inventory build-up. Maintain Hold with `243 target price. The stock is currently trading at 9.5x FY21e EPS.
Production picks up, inventory estimated at 35mt
CIL’s February, 2019 shipments rose 3% y-o-y to 51.5mt, with production rising 6.5% y-o-y to 58.1mt. For us, the greatest succour is 4/17% uptick in MCL’s (major subsidiary) shipments/production volume in February.
