Coal India Q4 Review- Ebitda Miss On Higher Cost, But Reversal In OBR Accounting Policy Boosts PAT: Systematix

Systematix Research Report

Coal India Ltd.'s Q4 FY24 net revenue of Rs 374 billion (-2% YoY, +3% QoQ) was 4% above our estimate, as e-auction premium over fuel supply agreements price came higher than we had expected. Ebitda at Rs 98.4 billion (+14% YoY, -18% QoQ) fell 12% short of our estimate as contractual and other expenses were higher. However, profit after tax at Rs 86.4 billion (+26%,-15% YoY/QoQ) surpassed our estimate by 16% as the company reversed its stripping activity provision.

As per its revised accounting policy, the existing advance stripping balance has been considered as a stripping activity asset under PP&E, which it expects to amortise over the remaining useful life of the respective mines.

With the reversal of stripping activity, provision was credited to the profit and loss account, leaving a balance of Rs 613 billion to be reversed in subsequent periods.

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