Coal India Q4 net profit up 35 per cent, beats estimates

NDTV Profit Desk

27 May 2013, 08:22 PM IST

Coal India Ltd posted a 35 per cent increase in its net profit at Rs 5414 crore for the fourth quarter ended March, 2013.

Quarterly numbers of the world's largest coal producer beat market estimates on the back of higher sales and lower-than-expected wage and fuel costs.

The state-run miner said net profit for the January-March quarter rose to Rs 5,414 crore from Rs 4,013 crore a year earlier. Net sales rose 2.5 per cent to Rs 19,905 crore.

On average, analysts had forecast net profit of Rs 4,997 crore, according to Thomson Reuters Starmine data. The company's financial year ended on March 31.

It reported employee expenses of Rs 7,470 crore, compared to Rs 9,466 crore a year ago, which included additional provision of about Rs 2,300 crore, an official said.

Wage increases had forced the company to make a steep provision during the same quarter last year, pushing up costs. However, the wage bill has been spread uniformly in the current fiscal year, officials said, explaining the lower costs.

Coal India produces about 80 per cent of India's total coal output, but growth has been stymied for years by delays in environmental and regulatory approvals for mining projects.

The miner produced 452 million tonnes of coal in 2012-13, up 4 per cent from a year earlier, but lower than its 464 million tonnes target for the year.

Shipments rose 5.8 per cent for the fourth quarter to 129.95 million tonnes, the company said.

Coal India chairman S Narsing Rao would not speculate on whether the company planned to raise prices, although the issue is politically sensitive in India where hundreds of millions of people live in poverty and there is an election within a year.

Last year, its main clients the power companies protested when prices were raised, forcing it to reverse the changes. Coal India prices domestic coal at discounts to international prices of between 45 and 70 per cent.

Coal India shares have underperformed the BSE Sensex this year over worries about its inability to increase production, but the stock remains an indicator of power demand in Asia's third-largest economy and the company, with a market value of $35.2 billion, is India's fifth-largest.

The government is planning to auction a 10 per cent stake in Coal India by August or September, sources told Reuters this month.

Coal India shares closed 1.2 per cent higher on Monday, ahead of the earnings in a strong Mumbai market.