Volume targets in focus for Coal India
Coal India Ltd’s (CIL) realization from coal sold through the e-auction route picked up sequentially in the three months ended December (Q3FY24), after falling for four straight quarters. The e-auction premium over coal sold through fuel supply agreement (FSA) prices stood at 117% in Q3 against 84% in Q2 aided by higher global coal prices. But it’s too soon to rejoice this as e-auction realization are poised to drop sequentially in Q4.
In a conference call with analysts on Monday, CIL’s management has indicated that e-auction premium has fallen sharply in the ongoing quarter. However, this could be offset by a higher share of e-auction volume. The management has pointed out e-auction volume can contribute about 15% of the overall pie in Q4.
For FY24 and FY25, CIL has trimmed its overall production and offtake guidance to 770 million tonnes (mt) and 838 mt, respectively, from 780 mt and 850 mt, earlier. For the nine month ended December (9MFY24), production and offtake stood at 532 mt and 552 mt, respectively. During the period, offtake grew almost 9% year-on-year.
Out of this, FSA volume contributed 89.5% of total volumes, whereas e-auction formed 8.6% of total. Overall, the company sees favourable demand from sectors such as power and steel. CIL is taking several measures to support its production targets such as using the MDO model (mine developer operators) for greenfield and brownfield mines; and FMC (first mile connectivity) projects for evacuation efficiency.
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