Coal India rating: Buy — Weak performance in the final quarter
Coal India reported flat sales (164 mn tons) for Q4FY20 to end the year with a 4.3% y-o-y decline in dispatch volumes at 582 mn tons resulting in net income declining 4.4% y-o-y to Rs 167 bn in FY2020. A 15% decline in e-auction revenues as well as lower overall coal demand on account of the Covid-19 outbreak will likely weigh on the earnings trajectory in FY2021e. Maintain Buy and revise fair value to Rs 215/share (from Rs 230/share previously) based on March 2022e earnings, noting inexpensive valuations.
Flat volumes and lower e-auction revenues continue to weigh on earnings
CIL reported revenues of Rs 256 bn (-4% y-o-y, +19% q-o-q), Ebitda of Rs 47.5 bn (-25% y-o-y, +42% q-o-q) and PAT of Rs 46.3 bn (-23% y-o-y, +18% q-o-q).
