Coal India Limited (CIL) is an Indian central public sector undertaking (PSU) under the ownership of the Ministry of Coal, Government of India. The company has their headquarters at Kolkata. It is the largest government-owned-coal-producer in the world. It is also the seventh largest employer in India with nearly 272,000 employees.
CIL contributes to about 82% to the total coal production in India and the company is the single largest coal producing company in the world. In April 2011, the Government of India conferred the Maharatna status to CIL, making it one of the seven in India. CIL ranks 8th among the top 20 firms responsible for a third of all global carbon emissions.
Coal India Ltd is primarily engaged in mining and production of Coal and also operates Coal washeries. The major consumers of the company are the power and steel sectors. Consumers from other sectors include cement, fertilizers, brick kilns etc.
Quarterly Growth Walkthrough
Coal India has reported a consolidated net profit of Rs 7,719 crore for the third quarter (Q3FY23) which has soared up by 70% from ₹4,557 crore in the corresponding quarter of the previous year. The production has gained strong momentum because of a higher power demand amidst extreme weather conditions. Sequentially, the net profit after tax has risen by 28% from Rs 6,044 crore which was reported in the December quarter. The company said the spike in profit was supported by higher add-on over the notified price in e-auction sale of 14.65 million tonnes coal during the third quarter.
The company’s consolidated revenue from operations during the last quarter has increased by 23% to ₹35,169 crore as compared with ₹28,434 crore in the third quarter of the previous year. The profit before tax for the December quarter was reported at Rs 10,594 crore which is up by 68% from ₹6,302 crore in the corresponding quarter of the last year. The company’s total expenses in the third quarter have increased to Rs 26,246 crore from Rs 22,781 crore in the corresponding quarter of the previous fiscal year.
Declaration of Dividend
The Board has approved the payment of second interim dividend at ₹5.25 per share for the current financial year 2022-2023. The company has fixed the date on Wednesday, 8th February 2023 as the record date for the payment of the second interim dividend.
Tenacity for Coal
The Centre has informed the utilities to continue with the usage of coal-fired power plants until 2030. The centre also plans to deploy an emergency law in February in order to force plants that run on imported coal to maximise output in preparation for a probable record consumption during summer this year.
CIL has sought government approval to raise the ceiling of investment for joint ventures from 30% of net worth to 50% as the company seeks to diversify into aluminium production besides setting up a 1,200 MW joint venture power plant in Madhya Pradesh. The chairman and managing director Pramod Agrawal said the proposal has been moved for interdepartmental discussions.
Technical Analysis
Coal India share price continues to face stiff resistance at the 38.2% retracement level. The price is above the 200-day moving average which makes it lightly overbought and the MFI is at 48 points which indicates that the stock still has some upside. The strong growth in the third quarter was based upon higher demands for energy and might not likely continue as a trending growth for the stock. However the numbers definitely have put the company back on traction and we might see the stock rise upto the 61.8% retracement level at Rs 318 in the mid-term.
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