Coal India had a really good quarter, growing by 13% to Rs 6,800 crore, which was much better than what experts predicted. This was because the company performed well, and certain costs were lower than expected. Their earnings before interest, taxes, depreciation, and amortization (EBITDA) went up by 11% to about Rs 8,900 crore.
The company’s profit increased by 13% to Rs 6,800 crore, surpassing the estimated Rs 5,000 crore, mainly because of how well the company operated and reduced depreciation costs. Ebitda, which is a measure of a company’s operating performance, exceeded expectations, coming in 54% higher than estimated, thanks to lower employee costs.
Experts believe that Coal India’s positive results are due to higher coal prices and lower employee costs than anticipated. Even though coal demand usually goes down in the second quarter, this year’s dry monsoon and increased economic activity kept demand high for Coal India. The company aims to dispatch 610 million tonnes of coal to the power sector by FY24.
Motilal Oswal Securities, a brokerage firm, increased its EBITDA estimates for Coal India for FY24 and FY25, citing the company’s strong performance, improved volume outlook, higher e-auction premiums, and lower costs. They maintain a “BUY” rating with a revised target price of Rs 380.
Nuvama Institutional Equities also expressed positivity, noting that Coal India’s earnings growth was driven by higher-than-expected coal prices and lower employee costs. They expect continued growth in the company’s earnings in the second half of FY24.
In simpler terms, Coal India had a great quarter, making more money than experts thought they would because coal prices were higher, and certain costs were lower. This positive trend is expected to continue, making Coal India an attractive investment option.