Rating: BUY | CIL: Stellar Q2 show, outlook positive
Coal India ltd (CIL) exceeded expectations in Q2FY24 with an EPS of `11.9/share, surpassing both our and consensus estimates by 35% and 25%, respectively. Key points include:
Volume growth: Positive volume trends were observed across all categories, offsetting the adverse effects of lower e-auction realisation.
Wage cost management: Wage costs, totalling `116.4 billion, remained at normalised levels and were within our projected estimates.
Provision adjustment: A significant unwinding of the Rs 81.5 billion provision made in FY23 for wage hikes was noted in Q2FY24. This resulted in a reduction of the cash and bank balance to Rs 370 billion.
