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Sector: Metals & Mining
Sector view: Neutral
Sensex: 21,194
52 Week h/l (Rs): 374 / 238
Market cap (Rscr) : 178,563
6m Avg vol (‘000Nos): 2,739
Bloomberg code: COAL IB
BSE code: 533278
NSE code: COALINDIA
FV (Rs): 10
Price as on Dec 27, 2013
Company rating grid
Low High
1 2 3 4 5
Earnings Growth
Cash Flow
B/S Strength
Valuation appeal
Risk
Share price trend
40
60
80
100
120
Dec ‐12 Apr‐13 Aug‐13 Dec‐13
Coal India Sensex
Share holding pattern
‐
50
100
Dec ‐12 Mar‐1 3 J un‐13 Sep‐13
P ro mo te rs In st it ut io ns O th ers
%
Change in Estimates Rating Target
Rating: BUYTarget: Rs323
CMP: Rs283
Upside: 14.2%
Company Report December 30, 2013
Research Analyst:
Tarang Bhanushali [email protected]
At inflexion point
The overhang of Government’s Follow on Public Offer (FPO), the Presidential
directive to sign FSAs with power producers and lower market linked prices
have resulted in Coal India underperforming the indices over the last one
year. We believe the impact of the above is already factored in the
underperformance of the stock. Realisations under e‐auction sales and
washed coal sales are near their bottom, and any increase in global coal
prices would lead to higher realisations for CIL. The recent price hikes
announced by the company indicates its ability to pass on the increased costs
to maintain profitability. With a dividend yield of 4.9% (dividend expected to
increase yoy), downside for the stock would be limited. Earnings are expected
to improve FY15 onwards on the back of higher volumes, marginal increase in
e‐auction prices and price hikes taken by the company during the year. At the
CMP, company trades at 5.2x FY15 EV/EBIDTA, lower than its historical
average of 7.8x. We value the company at 6.5x FY15 EV/EBIDTA and arrive at
a price target of Rs323.
Recent price hikes to offset cost increase
CIL has witnessed an increase in costs due to the deregulation of diesel and
an increase in employee costs. To mitigate the increase in costs, CIL over the
last one year has announced price rationalization exercises, thereby
protecting margins. On account of the price hikes and an increase in volumes,
we expect EBIDTA/ton to increase from Rs318/ton in FY14 to Rs377/ton in
FY15.
The
hike
indicates
CIL’s
ability
to
increase
prices
to
protect
its
margins
and contradicts the markets’ reservations about its pricing power.
Offtake growth expected at 3% yoy in FY14E
Coal India managed to produce 274.7mn tons (+3.7% yoy) and offtake stood
at 298.6mn tons (2% yoy) for the period April‐November ’13. This is below
management guidance due to few one‐offs like high temperature in Q1 FY14
and Cyclone Phailin in Q3 FY14. We expect CIL to end the year with a
production volume growth of 3.9% yoy and an offtake volume growth of 3%
yoy to 480mn tons. We estimate production growth to pick up on the back of
commissioning of new mines from H2 FY15.
Financial summary
Y/e 31 Mar (Rs m) FY13 FY14E FY15E FY16E
Revenues 683,027 706,805 754,914 794,190
yoy growth (%) 9.4 3.5 6.8 5.2
Operating profit 180,836 171,957 201,991 217,305
OPM (%) 26.5 24.3 26.8 27.4
Reported PAT 173,563 165,959 190,659 205,939
yoy growth (%) 17.4 (4.4) 14.9 8.0
EPS (Rs) 27.5 26.3 30.2 32.6
P/E (x) 10.3 10.8 9.4 8.7
Price/Book (x) 3.7 3.3 2.9 2.5 EV/EBITDA (x) 6.5 6.6 5.2 4.5
RoE (%) 39.0 32.3 32.8 31.0
RoCE (%) 54.7 47.4 48.3 46.0
Source: Company, India Infoline Research
Coal India Ltd
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Coal India Ltd
2
CIL to miss its coal offtake target of 492mn tons in FY14Coal India managed to report a strong volume growth of 6.1% in FY13 after
registering flat volumes in the previous two years. The strong sales volume
growth was largely led by liquidation of inventory on the back of higher
availability of railway rakes and a 3.8% yoy increase in production. The
company
has
guided
for
a
production
target
at
482mn
tons
and
offtake
at
492mn tons in FY14 on expectations of higher rake availability. We believe the
company would continue to miss both its target as H1 FY14 volumes were not
encouraging.
Coal India managed to produce 200.5mn tons and offtake for the half stood at
224.4mn tons in H1 FY14. Coal India’s production and dispatch grew by 4.7%
yoy and 4.5% yoy, respectively, in H1 FY14 and are lower than the target
production and dispatch by 2.9% and 1.2%. Coal production in Q1 FY14 was hit
due to restriction on movement of explosives, high temperature in May and
early arrival of monsoons. Coal production in May fell on account of reduced
working hours imposed by the Odisha state government due to a heat wave
during the month. This impact was offset to some extent by the strong
performance in Q2 FY14. Production in Q2 FY14 jumped by 10% yoy and
dispatch growth too remained strong at 7.2% yoy. However, numbers have not
been encouraging over the last two months.
Production in October was lower by 2.3% yoy to 35mn tons and dispatches
declined sharply by 8% yoy to 38.8mn tons. The company had suffered
production loss in October due to Cyclone Phailin, which affected the key coal
producing states of Odisha, Jharkhand and West Bengal. Though production
growth resumed in November to 4.3% yoy, dispatches degrew by 1.8% yoy.
Overall production growth for the period April‐November ’13 stands at 3.7%
yoy at 274.7mn tons and that of sales stands at 2% yoy at 298.6mn tons over
the same period.
CIL has guided for a production target
at 482mn tons and offtake at 492mn
tons in FY14 on expectations of
higher rake
availability
Coal India’s production and dispatch
grew by 4.7% yoy and 4.5% yoy,
respectively, in H1 FY14 and are
lower than
the
target
production
and
dispatch by 2.9% and 1.2%
Overall production growth for the
period April ‐November ’13 stands at
3.7% yoy at 274.7mn tons and that of
sales stands at 2% yoy at 298.6mn
tons over the same period
Monthly coal production volumes has been lower
than target for the first six months of FY14
Dispatches have been 3.8% lower than the target for
the period Apr‐Nov ‘13
20
30
40
50
60
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
(mn
tons)
FY13 FY14 FY14 target
20
30
40
50
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
(mn tons)
FY13 FY14 FY14 target
Source: Company,
India
Infoline
Research
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Coal India Ltd
3
With the company missing its target for the first eight months, CIL has reduced
its production target for FY14 from 482mn tons to 475mn tons. But we still
expect CIL to miss its new production growth target of 5% yoy and offtake
target of 5.7% yoy for FY14. We expect coal production to increase by 3.9% yoy
to 470mn tons against the company’s target of 475mn tons and offtake to
increase by 3.1% yoy to 480mn tons against the target of 492mn tons. The company has already liquidated coal inventory of 23.9mn tons in the first eight
months and hence the jump from liquidation of coal would be lower for the
rest of the year.
Increase in realisations restricted by lower e-auction prices
Coal India’s average realisation topped out in Q4 FY12 and has been declining
over the last one year despite the price hikes taken in Q4 FY12. The decline in
ASPs has been largely due to the decline in prices of e‐auction and washed coal
prices. With a sharp correction in international thermal coal prices, prices of
Coal India’s market linked sales have declined. E‐auction prices have gradually
declined from Rs2,852/ton in Q4 FY12 to Rs2,307/ton in Q4 FY13. Washed coal
prices too have been lower on a yoy basis. Adjusted for year‐end incentives
from power companies, ASPs have declined by 5% over the last one year. FY13
realisations were higher by 3.1% yoy against the 10% price hike taken for FSA
sales.
Coal India has witnessed an increase in costs due to the deregulation of diesel.
As a result, the company in May ’13 has announced an increase in its prices. It
also decided to rationalise its prices according to the market conditions. The
company increased prices of lowest grade (G17) coal, with Gross Calorific Value
(GCV) between 2,200Kcal/Kg and 2,500Kcal/Kg, by 11.1% from existing
Rs360/ton to Rs400/ton. Prices of Grade 6 coal, with GCV between 5,500 and
5,800Kcal/Kg, were increased 10.3% from Rs1,450/ton to Rs1,600/ton. For
premium‐grade or high‐grade coal there will be a reduction in prices by 12.5%.
As a result of this rationalisation, average price realisation would increase by 4.7% and would add Rs25bn to the company’s revenue in FY14.
We expect coal production to
increase by 3.9% yoy to 470mn tons
against the company’s target of
475mn tons and offtake to increase
by 3.1% yoy to 480mn tons against
the target of 492mn tons
FY13 realisations were higher by 3.1%
yoy against the 10% price hike taken
for FSA sales
Production to grow to 3.9% yoy to 470mn tons in
FY14
Offtake to increase by 3.1% yoy to 480mn tons
300
350
400
450
500
FY09 FY10 FY11 FY12 FY13 FY14E FY15E
(mn tons)
300
350
400
450
500
550
FY0 9 FY1 0 FY1 1 FY1 2 FY1 3 FY1 4E F Y1 5E F Y1 6E
(mn tons)
Source: Company, India Infoline Research
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Coal India Ltd
4
Further in December, the company increased prices for coal produced by its
Subsidiary, Western Coal Fields (WCL) and revised prices of raw non‐coking
coal sizing charges and rapid loading charges. CIL currently charges Rs39‐
77/ton for sizing and Rs20/ton for usage of rapid loading system. CIL has hiked
these charges by Rs12‐25/ton for sizing and Rs6/ton for rapid loading. Due to
this revision, CIL will earn additional revenue of approximately Rs1.97bn for the balance period of FY14. In addition, WCL has hiked its prices by 10%. This
will be applicable for thermal coal of band G‐6 to G‐17 under the gross calorific
value (GCV) mechanism. Due to this increase, WCL will earn additional revenue
of ~Rs1.4bn for the balance period of FY14. These hikes are likely aimed at
neutralizing the impact of costlier fuel. The impact of the above hikes, when
annualized, could further add ~1.7% to CIL revenues.
The impact of the above rationalisation exercise on overall ASPs would be
lowered by a decline in its e‐auction sales. We believe that e‐auction and
washed coal prices would continue to remain weak in the near term. In our
view, global coal prices are likely to remain in a narrow range from current
levels and therefore, e‐auction coal prices should witness a similar trend.
Though a significant decline in e‐auction ASPs from current levels is unlikely,
we do not expect any upward movement too. E‐auction prices declined 2% yoy in FY13 and we expect it to decline further by 14.5% yoy to Rs2,175/ton in FY14
before a minor rebound of 2% in FY15. We also expect beneficiated coal prices
to decline by 5% yoy in FY14 and then rebound by 2% in FY15. As a result of the
above, ASPs for Coal India would increase marginally by 0.3% in FY14 to
Rs1,473/ton and 3.5% in FY15 to Rs1,525/ton.
WCL has hiked its prices by 10%, due
to this increase, it will earn additional
revenue of ~Rs1.4bn for the balance
period of FY14
ASPs for Coal India would increase
marginally by 0.3% in FY14 to
Rs1,473/ton and 3.5% in FY15 to
Rs1,525/ton
ASP increase curtailed at 0.3% yoy in FY14E due to
weak market linked realisations
ASP topped out in Q4 FY12 due to higher e‐auction
prices and incentives for the year
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600 1,700
FY0 9 FY1 0 FY1 1 FY1 2 FY1 3 FY1 4E FY1 5E FY1 6E
(Rs/ton)
1,250
1,300
1,350
1,400
1,450
1,500
1,550
1,600
Q 2 F
Y 1 2
Q 3 F
Y 1 2
Q 4 F
Y 1 2
Q 1 F
Y 1 3
Q 2 F
Y 1 3
Q 3 F
Y 1 3
Q 4 F
Y 1 3
Q 1 F
Y 1 4
Q 2 F
Y 1 4
(Rs/ton)
Source: Company, India Infoline Research
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Coal India Ltd
5
Share of market linked sales volume to declineOver the last one year, Coal India has reduced its e‐auction sales volume and
has been more focused on meeting the requirements of power companies.
Share of e‐auction sales of total sales volume declined from 11.8% in FY12 to
10.6% in FY13. The management has guided for flat growth in e‐auction sales
at 48
‐50mn
tons
in
FY14,
reducing
the
share
to
10.2%.
The
growth
in
washed
coal sales, which has been stagnant over the last few years, witnessed a 16.5%
yoy decline in FY13. We expect growth in sales of beneficiated coal to be flat
over the next two years at 14mn tons and its share to reduce from 3.9% in
FY12 to 2.8% in FY15.
Signing of new FSAs would reduce incentives in the near termTo increase the investments and a revival of the power sector, a Presidential
Directive was issued by the Ministry to CIL on 17th
June ‘13 for signing of FSAs
for a total capacity of 78,000MW during the remaining four years of 12th
Plan
subject to fulfillment of all formalities. Actual coal supplies would, however, be
available when the required long‐term Power Purchase Agreements (PPAs) are
tied up. Supply of domestic coal to these projects has been restricted to 65%,
65%, 67% and 75% during these four years, keeping in view the availability of
coal. To meet its balance FSA obligations, CIL may import coal and supply the
same to the willing power plants on cost plus basis. Power plants may also directly import coal themselves, if they so opt.
CIL had kept a deadline of 31st
August ’13 to sign the FSAs with the concerned
parties. However, with pressure from the Government it continued to sign
FSAs after that. Out of the total 173 FSAs pending, 157 FSAs have been signed
so far for a capacity of 71,145MW, in addition to FSAs signed in respect of
power plants commissioned before 31st
March ‘09. The company has been
focused on supplying coal to power plants to boost power production in the
country. The cumulative off ‐take to the power sector during the period April‐
Sept
‘13
stood
at
195mn
tons.
The management has guided for flat
growth in e‐auction sales at 48‐50mn
tons in FY14, reducing the share to
10.2%.
E‐auction volumes to remain stagnant due to
increase in supplies to power companies
… washed coal sales volume to remain flat over the
next two years
8
9
10
11
12
13
14
0
10
20
30
40
50
60
F Y 0 9
F Y 1 0
F Y 1 1
F Y 1 2
F Y 1 3
F Y 1 4 E
F Y 1 5 E
F Y 1 6 E
(%)(mn tons)
Volume % share of total volumes
2
3
4
5
12
14
16
18
F Y 0 9
F Y 1 0
F Y 1 1
F Y 1 2
F Y 1 3
F Y 1 4 E
F Y 1 5 E
F Y 1 6 E
(%)(mn tons)
Volume % share of total volumes
Source: Company, India Infoline Research
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Coal India Ltd
6
Supply of coal to power companies
Year
Committed qty
under FSA (mn tons)
Despatched
(mn tons)
Achievement
(%)
FY11 334.5 304.2 91
FY12 344.4 312.1 91
FY13 375.8 344.4 92
H1 FY14 222.8 194.5 87 Source: Company, India Infoline Research
Coal India earns incentives from power companies for supplying coal more
than the trigger level of the annual contracted amount. According to the old
format for FSA, CIL is eligible for incentives if it supplies more than 90% of the
annual contracted quantity and under the new format, prepared in 2012, CIL
will be eligible for incentives if it supplies more than 80% of the contracted
quantity. Over the last two years, CIL has managed to collect Rs10bn in FY12
and Rs13bn in FY13 as incentives from the power players. Incentives accounted
for 6.8%
of
PAT
in
FY12
and
7.5%
of
PAT
in
FY13.
Coal
India’s
supply
has
already
been lower than the target set in H1 FY14 at 87%, which is below the 92%
achieved in FY13. We believe going ahead incentives would reduce as the
threshold limit to earn incentives would be quite high compared to the
previous two years.
EBIDTA/ton to jump yoy in FY15E
CIL’s costs have risen sharply over the last one year due to an increase in diesel
costs and contractual mining costs. Diesel costs have jumped as the
Government has deregulated bulk diesel sales. Stores and spares per ton of
coal sold jumped 6% yoy in FY13 and is expected to increase further by 9% yoy
in FY14. We expect diesel price for bulk buyers to increase marginally in FY15
and expect stores cost per ton to increase by 4% yoy. Contractual expenses too
increased by 14% in FY13 and we expect it to be higher by 10% yoy in FY14 and
5% yoy each over the next two years.
Coal India’s supply has already been
lower than the target set in H1 FY14
at 87%, which is below the 92%
achieved in
FY13.
Stores and contractual expenses to jump in FY14 Employee head count would continue to reduce
over the next three years due to retirement
30
50
70
90
110
130
150
170
FY09 FY10 FY11 FY12 FY13 FY14E FY15E
(Rs/ton)
Stores Contractual
275,000
300,000
325,000
350,000
375,000
400,000
425,000
FY1 0 FY1 1 FY1 2 FY1 3 FY1 4E F Y1 5E F Y1 6E
Source: Company, India Infoline Research
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Coal India Ltd
7
The impact of higher wage cost would be marginally offset by an increase in
sales volume. We expect costs per ton to increase by 4.1% yoy to Rs1,155/ton
in FY14 and remain flat in FY15. EBIDTA/ton is expected to decline yoy in FY14
as the impact of price hikes taken by CIL would be offset by lower market
linked sales revenue, lower incentives from power players and an increase in
costs. We expect EBIDTA/ton to decline to Rs318/ton in FY14 and then to jump to Rs377/ton in FY15. The increase in margins is on account of the full impact
of the price hikes announced and higher volumes.
Debtor days to peak out in Q3 FY14
CIL’s debtor days have been constantly rising over the last four years due to
delay in payments from debt‐ridden power companies. Debtors further jumped
in H1 FY14 due to the altercation between CIL and NTPC over the quality of the
coal. Debtor days increased from 25 days in FY11 to 56 days in FY13 and are
expected to rise further in FY14. Debtors increased from Rs34bn in FY11 to
Rs105bn in FY13 and further to Rs113bn in Q2 FY14. To counter the rising
debtors CIL has started to recover from its major debtors. CIL has started
deducting up to 15‐25% of the upfront payments for new supplies by its
consumers to recover the dues. As a result, total outstanding has come down
from a high of about Rs130bn in August ’13 to ~Rs110bn in November ’13. The
company expects to reduce the total outstanding to Rs90bn by end‐FY14. We
expect debtors to account for Rs113bn by end‐FY14 and to decrease marginally
over the next two years.
We expect EBIDTA/ton to decline to
Rs318/ton in FY14 and then to jump
to Rs377/ton in FY15
Total outstanding has come down
from a high of about Rs130bn in
August ’13 to ~Rs110bn in November
’13. The company expects to reduce
the total outstanding to Rs90bn by
end ‐FY14
Costs per ton to increase 4.1% yoy in FY14 due to
high diesel costs
… Impact of higher costs would be marginally offset
by the price hikes announced; but EBIDTA/ton to
decline 12% yoy in FY14E
(15)
(10)
(5)
0
5
10
15
20
25
30
700
800
900
1,000
1,100
1,200
F Y 0 9
F Y 1 0
F Y 1 1
F Y 1 2
F Y 1 3
F Y 1 4 E
F Y 1 5 E
(%)(Rs/ton)
Cost per ton yoy chng
‐
50
100
150
200
250
300
350
400
FY10 FY11 FY12 FY13 FY1 4E FY15E FY16E
(Rs/ton)
Source: Company, India Infoline Research
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Coal India Ltd
8
Negatives priced in; Valuations attractiveCoal India has underperformed the indices over the last year due to the
overhang of Government’s Follow on Public Offer (FPO), the presidential
directive to sign FSAs with power producers and lower market linked prices.
We believe the impact of the above is already factored in the
underperformance of
the
stock.
CIL
has
witnessed
an
increase
in
costs
due
to
the deregulation of diesel and an increase in employee costs. To mitigate the
increase in costs CIL over the last one year has announced price rationalization
exercise, thereby protecting margins. On account of the price hikes announced
and the increase in volumes, we expect EBIDTA/ton to increase from
Rs318/ton in FY14 to Rs382/ton in FY15. The hike indicates CIL’s ability to
increase prices to protect its margins and contradicts the markets’ reservations
about its pricing power.
CIL managed to produce 274.7mn tons (+3.7% yoy) and offtake stood at
298.6mn tons (2% yoy) for the period April‐November ’13. This has been below
the management guidance due to few one‐offs like high temperature and
Cyclone Phailin. We expect CIL to end the year with a production volume
growth of 3.9% yoy and an offtake volume growth of 3% yoy to 480mn tons.
We estimate production growth to pick up on the back of commissioning of
new mines from H2 FY15.
Realisations under e‐auction sales and washed coal sales are near their bottom,
and any increase in global coal prices would lead to higher realisations for CIL.
The recent price hikes announced by the company indicates the company’s
ability to pass on the increased costs to maintain profitability. With a dividend
yield of 4.9% (dividend expected to increase yoy), downside for the stock
would be limited. Earnings are expected to improve FY15 onwards on the back
of higher volumes, marginal increase in e‐auction prices and price hikes taken
by the company during the year. At the CMP, company trades at 5.2x FY15
EV/EBIDTA, lower than its historical average of 7.8x. We value the company at
6.5x FY15 EV/EBIDTA and arrive at a price target of Rs323.
Trading below its average 1‐year forward EV/EBIDTA
0
2
4
6
8
10
12
14
Nov‐10 Apr‐11 Sep‐11 Mar‐12 Aug‐12 Jan‐13 Jul‐13 Dec‐13
EV/EBIDTA (x) Average EV/EBIDTA (x)
Source: Company, India Infoline Research
To mitigate the increase in costs CIL
over the last one year has announced
price rationalization
exercise,
thereby
protecting margins
We estimate production growth to
pick up
on
the
back
of
commissioning
of new mines from H2 FY15
Realisations under e‐auction sales
and washed coal sales are near their
bottom, and any increase in global
coal prices would lead to higher
realisations for CIL
With a dividend yield of 4.9%
(dividend expected to increase yoy),
downside for the stock would be
limited.
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Coal India Ltd
9
Financials
Income statement Y/e 31 Mar (Rs mn) FY13 FY14E FY15E FY16E
Revenue 683,027 706,805 754,914 794,190
Operating profit 180,836 171,957 201,991 217,305
Depreciation (18,130) (20,012) (22,037) (24,215)Interest expense (452) (461) (470) (479)
Other income 87,467 96,216 105,083 114,761
Profit before tax 249,722 247,700 284,566 307,371
Taxes (76,227) (81,741) (93,907) (101,432)
Adj. profit 173,495 165,959 190,659 205,939
Exceptional items 69 0 0 0
Net profit 173,563 165,959 190,659 205,939
Balance sheet Y/e 31 Mar (Rs mn) FY13 FY14E FY15E FY16E
Equity capital 63,164 63,164 63,164 63,164
Reserves 421,556 479,134 557,733 642,631
Net worth 484,720 542,298 620,897 705,794
Minority interest 636 636 636 636
Debt 10,778 8,778 6,778 4,778
Total liabilities 496,134 551,712 628,311 711,208
Fixed assets 169,617 179,601 192,564 203,348
Investments 23,950 23,950 23,950 23,950
Deff tax liab (net) 22,550 22,550 22,550 22,550
Net working capital (342,343) (339,598) (345,841) (347,868)
Inventories 56,178 49,414 52,777 55,523
Sundry debtors 104,802 113,873 103,380 97,883
Other current assets 216,190 223,716 238,944 251,375 Sundry creditors (203,601) (210,689) (225,029) (236,737)
Other current liabilities (515,913) (515,913) (515,913) (515,913)
Cash 622,360 665,209 735,088 809,228
Total assets 496,134 551,712 628,311 711,208
Cash flow statement Y/e 31 Mar (Rs mn) FY13 FY14E FY15E FY16E
Profit before tax 249,722 247,700 284,566 307,371
Depreciation 18,130 20,012 22,037 24,215
Tax paid (76,227) (81,741) (93,907) (101,432)
Working capital ∆ (16,477) (2,745) 6,243 2,028
Operating cashflow 175,148 183,227 218,939 232,181Capital expenditure (24,310) (29,996) (35,000) (35,000)
Free cash flow 150,837 153,230 183,939 197,181
Equity raised 11,625 (0) ‐ ‐
Investments (4,136) ‐ ‐ ‐
Debt financing/
disposal (2,555) (2,000) (2,000) (2,000)
Dividends paid (104,999) (108,381) (112,061) (121,041)
Other items (10,441) ‐ ‐ ‐
Net ∆ in cash 40,332 42,849 69,879 74,140
Key ratios Y/e 31 Mar FY13 FY14E FY15E FY16E
Growth matrix (%)
Revenue growth 9.4 3.5 6.8 5.2
Op profit growth 15.4 (4.9) 17.5 7.6
EBIT growth 17.8 (0.8) 14.9 8.0
Net profit growth 18.1 (4.3) 14.9 8.0
Profitability ratios (%)
OPM 26.5 24.3 26.8 27.4
EBIT margin 36.6 35.1 37.8 38.8
Net profit margin 25.4 23.5 25.3 25.9
RoCE 54.7 47.4 48.3 46.0
RoNW 39.0 32.3 32.8 31.0
RoA 15.2 13.3 14.4 14.5
Per share
ratios
EPS 27.5 26.3 30.2 32.6
Dividend per share 14.0 14.5 14.9 16.1
Cash EPS 30.3 29.4 33.7 36.4
Book value per share 76.7 85.9 98.3 111.7
Valuation ratios
P/E 10.3 10.8 9.4 8.7
P/CEPS 8.1 8.3 7.3 6.7
P/B 3.7 3.3 2.9 2.5
EV/EBIDTA 6.5 6.6 5.2 4.5
Payout (%)
Dividend payout 60.5 65.3 58.8 58.8
Tax payout 30.5 33.0 33.0 33.0
Liquidity ratios
Debtor days 56 59 50 45
Inventory days 30 26 26 26
Creditor days 109 109 109 109
Du‐Pont Analysis Y/e 31 Mar FY13 FY14E FY15E FY16E
Tax burden (x) 0.69 0.67 0.67 0.67
Interest burden (x) 1.00 1.00 1.00 1.00EBIT margin (x) 0.37 0.35 0.38 0.39
Asset turnover (x) 0.60 0.57 0.57 0.56
Financial leverage (x) 2.57 2.43 2.28 2.14
RoE (%) 39.0 32.3 32.8 31.0
8/18/2019 Coal India Iifl Dec13
10/10
Recommendation parameters for fundamental reports:
Buy – Absolute return of over +10%
Market Performer – Absolute return between ‐10% to +10%
Sell – Absolute return below ‐10%
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