Coal India - March 2013 Results Preview - Motilal Oswal

- Expect Coal India (COAL) to report 4QFY13E PAT of INR64b (up 6% YoY).

- RB Index is almost flat QoQ at USD85.8/ton, v/s USD85.6/ton in 3Q. For 4QFY13, currency also remained flat on a sequential basis from 54.4/USD to 54.2/USD.

- Hike in diesel prices (September 2012 by INR5/litre and ~INR11/litre in Jan-13) could have sizable impact in 4QFY13E and FY14E.

- We also expect the employee cost to increase QoQ led by a hike in DA (revised from January 3, 2013) and we estimate 2.2% hike in staff cost QoQ. Contractual expenses are also set to increase as CIL board's approved an increase in contractual workers' pay on Feb-13.

- ACQ realization is expected to be higher in 4Q (QoQ) as COAL books bonus on FSA quantity while we remain cautious on possible negative surprise arising on account of a higher grade coal price revision.

- We expect COAL to report consolidated PAT of INR191b in FY13E (up 19% YoY) and INR188b in FY14E (down 1% YoY). Stock trades at reported P/E of 9.6x FY15E.

Source : Equity Bulls

Keywords