Coal India Ltd has had a forgettable start to the new fiscal year with despatches falling by 25.4% year-on-year in April following a drop in demand for thermal power because of the shutdown across the country. At a mere 39.1 million tonnes, this is the lowest April volume since FY13, said analysts at Edelweiss Securities Ltd in a report on 4 May.
The general slowdown in the economy because of the lockdown has led to India’s electricity consumption shrinking, particularly in the fourth quarter. In fact, electricity growth in FY20 was flat, say analysts.
Demand for coal is likely to continue to be sluggish as demand for electricity is not expected to rise much in the near future. Therefore, coal despatches may remain weak this year.
