Despite soft volume growth estimated in FY26, the brokerage expects the additional levy at Northern Coalfields to mitigate the financial impact to a large extent. Taking cognizance of lower-than expected Feb'25–YTD volumes, we lower our volume growth estimate for FY25/FY26 to 1%/4% (earlier 3%/5%).
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ICICI Securities Report
We see Coal India Ltd.'s FY25 performance to be impacted by possibly stagnant volumes, though e-auction price remains relatively stable. Key points:
Production and offtake volumes until Feb'25–YTD was impacted by rake unavailability, inclement monsoons and ongoing production issues at South Eastern Coalfield Ltd.
Additional revenue from the additional levy at Northern Coalfields Ltd. mines likely at Rs 38 billion for FY26E.
Pithead inventory at 94 million tonnes as on end-Feb'25.
Relatively firm Indonesian prices (compared to South Africa) likely to aid e-auction prices in the near-term.
We have pruned our sales volume growth estimate for FY25/FY26 to 1%/4% (earlier 3%/5%). Our revised target price works out to Rs 440 (earlier Rs 455) on an unchanged 7.5x FY27E EPS. Maintain Buy.
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