Weak on expected lines. Coal India reported weak earnings in Q1FY21 on the back of 21% yoy decline in volumes, and aggravated by 6.7% yoy decline in blended realisations. Reversal of the overburden provision of Rs 2.5 bn salvaged earnings to some extent resulting in Ebitda decline of 68% yoy to Rs 15.7 bn. Improvement in eauction premiums as well as a more healthy 9.6% yoy growth in dispatches in August 2020, lend hope for an improved earnings profile from hereon. Maintain BUY with revised fair value of Rs 195/share (from Rs 215/share earlier).
Net sales at Rs 13.8 bn declined 34% yoy (KIE: Rs 19.2 bn) due to lower commodity prices (aluminum: -16% yoy; alumina: -33% yoy). Covid-19 impacted volumes at both aluminum and alumina divisions. Ebitda at Rs 1.3 bn declined 40% yoy (KIE: Rs 284 mn) due to high operating leverage partly offset by inventory build-up of Rs 4.4 mn. Net income of Rs 166 mn was down 83% yoy and 84% qoq on lower other income.
