Coal India (CIL) rose 1.63% to Rs 192.90 after the PSU company said that its capital expenditure (capex) soared 65% to Rs 3,034 crore during April-June 2022 compared to Rs 1,841 crore of April-June 2021 resulting in Rs 1,193 crore volume increase.
The company said that it has sustained its growth in capex for the ninth successive quarter.
A senior official of the company, said, “The capex increase came on the back of a strong spending in acquiring land and strengthening transport infrastructure in our coalfields under first mile connectivity proiects. These two vital areas help CIL in expanding its mining operations for accelerated production and pairing it with seamless transportation of coal.”
Land acquisition at Rs 608 crore accounted for nearly one-fifth of the first quarter’s total capex basket. This represents close to 2.3 fold increase compared to Rs 268 crore spent under this head during April-June 2021. The expenditure was spread across all the subsidiaries of CIL.
Capex under first-mile connectivity (FMC) proiects, on construction of coal handling plants, silos including weighbridges totaled to Rs 577 crore during the quarter under reference. This is a four-fold increase compared to Rs 141 crore spent in Q1 FY21.
Rail sidings and laying of rail corridors took up Rs 571 crore during Q1 FY23 clocking 57% growth. On a like to like comparison the expenditure under this head was Rs 363 crore.
Both the evacuation logistics projects put together at Rs 1,148 crore accounted for more than one-third or 38% of the total capex of Rs 3,034 crore of the first quarter.
Another significant capex head was joint ventures, Hindustan Urvarak Rasayan (HURL) and Talcher Fertilizers which consumed Rs 518 crore. HURL’s Gorakhpur plant has already started the production whereas Sindri and Barauni plants will become operational during the fiscal.
The company’s executive said, “CIL’s production tempo is keeping up a consistent double-digit growth in FY’23 so far and all efforts are on to continue the trend. What assumes importance is to have a matching evacuation infrastructure that can handle transportation of the increased output.”
Even during Covid-19 slowdown CIL’s capex spending witnessed steady quarter wise increase, the company stated.
CIL is a coal mining company engaged in the production and sale of coal. As of 31 March 2022, the Government of India held 66.13% stake while Life Insurance Corporation (LIC) of India held 11% stake in the company.
On a consolidated basis, the PSU coal major’s net profit jumped 45.9% to Rs 6,692.94 crore on 22.6% increase in net sales to Rs 30,046.25 crore in Q4 FY22 over Q4 FY21.
