Coal India Ltd.'s quarterly profit declined led by lower demand for electricity as the country reeled under a nationwide lockdown to curb the spread of Covid-19.
Net profit of the world's biggest coal miner fell 55% year-on-year to Rs 2,080 crore in the April-June quarter, according to the company's exchange filing. Analysts' estimates compiled by Bloomberg had pegged profit at Rs 1,948 crore.
- Revenue fell 26% over last year to Rs 18,487 crore—lower than the estimated Rs 18,594 crore.
- Operating profit fell 54% to Rs 3,052 crore.
- Margin narrowed by 10 percentage points to 16.5%.
Demand for electricity in India fell as offices, factories and other commercial establishments remained shut through most of April due to the pandemic. As a result, there was a decline in the offtake of coal by power plants which comprise nearly 80% of Coal India's sales.
The state-run miner has already cut its production target by nearly 9% to 650 million tonnes. The company will also cut employee costs by reducing manpower substantially in 2-3 years.
That said, in August, Coal India saw its first rise in monthly shipments since February. With the economy gradually reopening, power demand has started rising. And power plants, which had seen their inventories fall, are looking to replenish stockpiles.
Shares of Coal India closed 2.14% higher, ahead of the earnings announcement, while the benchmark BSE Sensex ended trade 0.48% up.
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