Coal India rating – Buy: A much improved earnings performance

CIL reported A much improved earnings performance in Q2FY21 aided by (i) 9.4% y-o-y increase in sales volumes; (ii) reversal of OBR provision of Rs 5.7 bn; and (iii) a surprising 44% y/y increase in e-auction volumes despite weak auction prices (-29% y/y ). Improvement in e-auction premiums have been measured since Q2FY21, though the volume trajectory will likely look better due to a favourable base and improving demand. Maintain Buy; revised FV Rs 180 (from Rs 195).