Coal India’s PAT touches all time high

Coal India Ltd’s (CIL) consolidated profit after tax (PAT) touched

`22,597 crores in the 9 months till December FY23, an all-time high, higher than even the full-year highest profit of `17,464 crores earned in FY19.

CIL’s PAT during April-December FY23 zoomed up by a strong y-o-y growth of 112 percent against `10,663 crores for the comparable period of FY22.

“It scaled up its profit to higher orbit despite capping coal prices for the past five years amidst rising input costs especially diesel and explosives,” the company said in a release.

CIL’s post tax profit during Q3 rose sharply to `7,719 crores, clocking a robust 69 percent growth. This is also a historic high for this period in any year till now. For the comparable quarter of FY22, CIL’s PAT was `4,557 crores.

The steep rise in profit came on the back of higher add-on over the notified price in e-auction sale of 14.65 million tons (mt) coal during Q3. Though auction volumes were lower by 44 percent in current fiscal’s Q3, compared to 26 mt in similar quarter FY22, higher premiums under the e-window helped CIL in cranking up sales by `2,341 crores.

The realisation per ton of coal was `5,046 under auction segment, in Q3 against `1,947 per ton for comparable quarter in FY22.

The jump was `3,099 per ton or 159 percent. Volume sale of 158 mt and better average realisation under FSA resulted in a net impact of around `3,580 crore.

FSA sale increased by 13.2 mt in the Q3 of FY23 compared to 144.6 mt of previous fiscal’s Q3. Realisation per ton of coal under FSA category was `1,482 in Q3 FY23, an increase of 8.2 percent compared to `1,370 per ton of Q3 FY22.

The company’s net sales was up 25 percent year-on-year (y-o-y) to `32,429 crores compared to `25,991 crores of third quarter of previous FY. EBITDA rose by 91 percent for the nine-month period to `31,998 crores from `16,769 crores of same period in FY22.

Till nine months ending December FY23, CIL output logged 16 percent growth at 479 mt while supplies to coal fired plants expanded by 18.8 mt to 432.7 mt.

Average cost of coal imported by CIL as a channelising agency has dropped marginally during the December quarter to `13,297 a ton from `13,529 a ton in September quarter.

Even then, its 2.5 times higher than `5,046 a ton from e-auction and 9 times more than `1,482 a ton earned from supplies under FSAs. Pricing of coking coal supplied by CIL during December quarter dropped to `9,949 a ton from `10,263 a ton in the September quarter.

E-auction realisation dropped from `6,061.51 a ton in September quarter to `5,046.08 a ton in December quarter. CIL sells 8-15 percent of its volumes each year in e-auctions at auction-determined prices, which are more correlated to international coal prices of similar grade.

E-auction pricing has been elevated in FY23, due to the global energy crisis as a result of the Russia-Ukraine situation and other sectoral factors.

Global coal prices have continued declining which will also pull down CIL’s e-auction realisations, with a lag of 2-3 quarters, analysts said.