CIL's capex grows 8.5% to Rs.4700 Crs in April-July FY 2024

With Coal India Limited (CIL) continuing to invest heavily in evacuation infrastructure, land, and mining machinery the company's capital expenditure at Rs.4,700 Crores ending July FY 2024 clocked 8.5% year-on-year growth.

The capex utilization during the referred period was nearly 100% of the progressive target of Rs.4,754 Crores and 28.3% of annual target of Rs.16,600 Crores of FY 2024.

Typically the capex starts slow in the first quarter with the company laying out the expenditures plans at the beginning of the fiscal and gradually builds up in the subsequent quarters. What makes the 8.5% capex growth in April-July FY 2024 significant was it came over a high base of Rs.4.332 Crores of same period FY 2023, the year when CIL's capex peaked to an all-time high of Rs.18,619 Crores.

"At a time when the Centre has been directing the CPSEs to scale up their capital expenditure for economic revival, CIL in a span of three years has stepped up its capex by three fold or 197%. From Rs.6,270 Crores in FY 2020 the capex shot up sharply to Rs.18,619 Crores in FY 2023" said a senior official of CIL.

Land was the major expenditure head at Rs.1,311 Crores accounting for 28% of the total capex spend of April-July 2023. This was closely followed by the procurement of heavy earth moving machinery that took up Rs.1,083 Crores or 23%.

Land acquisition and strengthening the modernized mining fleet are twin essentials for sustaining the production tempo especially when the company is faced with stiff targets.

Capex on construction of rail sidings and rail corridors and coal handling plants and silos, for faster evacuation of coal, was Rs.664 Crores and Rs.572 Crores respectively.

Underscoring the company's resolve to shore up evacuation infrastructure the budgeted provision for construction of rail sidings and corridors at Rs.4,169 Crores is the highest among the capital expenditure heads for entire FY 2024.

For land acquisition a total amount of Rs. 2,907 Crores was identified for the ongoing fiscal year. While construction of CHPs/Silos is pegged at Rs.2,174 Crores, procurement of HEMM would take up Rs. 1.965 Crores in FY 2024. Rest would be on other heads like plant and machinery; solar projects, JVs and coal washeries.

"Our production is poised to increase substantially in the ensuing years and it is vital to align it with seamless coal transportation. This necessitates heavy investment in coal evacuation infrastructure and first mile connectivity projects with CHP/silo combination", said the official.

Shares of Coal India Limited was last trading in BSE at Rs. 233.90 as compared to the previous close of Rs. 234.95. The total number of shares traded during the day was 325189 in over 6109 trades.

The stock hit an intraday high of Rs. 235.95 and intraday low of 230.80. The net turnover during the day was Rs. 75792306.00.

Source : Equity Bulls

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CoalIndia INE522F01014 Capex