After five consecutive months of decline in output, Coal India Ltd’s latest production figures came as a relief for investors. In October, coal production was about 28% higher than September, while dispatches rose around 15%. The news sent shares of Coal India up 3.8% on Monday. The stock gained about 14% in the past one month, though it slipped 1.6% in early trade today.
Erratic and unprecedented monsoon led to persistent contraction in production figures in the past few months, while flooding caused outage at some of its mines. However, with October production up about 9 million tonnes month-on-month, it seems like the worst is behind for Coal India. Besides, its subsidiary Northern Coalfields Limited posted highest mining volumes.
Analysts say, with the monsoon season now over, the fall in production has halted. “In our view, volume woes are likely over due to a stable demand outlook and improved rake availability,” said analysts at Edelweiss Securities Ltd in a recent note to clients.
