By Manvi Pant
BENGALURU (Reuters) – Coal India surged past first-quarter profit estimates on Wednesday, as higher sales volumes and dip in employee costs countered weakness in prices.
The company, which produces about 80% of India’s coal, reported consolidated net profit of 109.59 billion rupees ($1.31 billion), up 4% from a year ago.
However, this was well ahead of analysts’ average expectation of 80.35 billion rupees, as per LSEG data.
“Coal India’s results came in bigger-than-expected supported by a decline in employee costs,” said Kunal Kothari, research analyst at Centrum Broking, which had forecast a profit of 74.29 billion rupees.
A 5% decline in employee costs to 114.55 billion rupees beat Centrum’s estimates of 120 billion rupees, leading to a flattish cost of production, Kothari added.
Meanwhile, a 6.2% rise in sales volume offset a 5.5% dip in realisation, Kothari said. The company did not disclose its average realisation – the average selling price per unit of coal.
During the April-June quarter, India experienced a sharp rise in power demand amid sturdy manufacturing sector activity and extreme heat conditions in a summer that stretched beyond the March-May period into June.
Coal India mainly produces non-coking coal for power generation and industries, along with some coking coal for steelmaking, and washed coal.
Revenue from operations rose 1.3% to 364.65 billion rupees, analysts were expecting revenue of 361.22 billion rupees.
The state-run miner’s offtake – the amount of coal sold or committed to be sold – rose 5.5%, lagging behind a 7.9% growth in production which it reported earlier in the month.
($1 = 83.6790 Indian rupees)
(Reporting by Manvi Pant and Yagnoseni Das in Bengaluru; Editing by Varun H K)
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