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ICICI Securities Report
Coal India Ltd.'s focus continues to be on meeting the power sector's demand for coal. With a current despatch run-rate of 1.9-1.95 metric tonne per day, of which 1.6-1.65 mtpd is supplied to the power sector, the company is looking at a dispatch target of 670 million tonne in FY22 and e-auction sales volumes at around FY21 levels of more than 90 mnte.
Power demand outlook and 45-50% e-auction premium in October 2021 indicate that demand is strong. If demand sustains, Coal India will ramp up supply in the coming months.
Rising diesel cost and impending wage revision make us believe that Coal India will have to hike fuel supply agreement prices soon.
Coal India has been able to reduce its receivables to sustainable levels (Rs 120 billion currently).
We believe H2 FY22 will see higher offtake and higher realisation for both FSA and e-auctions.
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