Top Indian Companies: Coal India Limited

Coal India Limited (CIL) is an Indian government-owned coal mining and refining corporation under the Ministry of Coal. Headquartered in Kolkata, West Bengal, it is the largest coal-producer in the world and a Maharatna public sector undertaking.

The company contributes around 82% to the total coal production in India. CIL ranks 8th among the top 20 firms responsible for a third of all global carbon emissions. It is a Nifty 50 company with a weightage of 0.43%.

Subsidiaries

CIL produces coal through seven of its wholly owned subsidiaries. These are Eastern Coalfields Limited (ECL), Bharat Coking Coal Limited (BCCL), Central Coalfields Limited (CCL), Western Coalfields Limited (WCL), South Eastern Coalfields Limited (SECL), Northern Coalfield Limited (NCL), and Mahanadi Coalfields Limited (MCL).

Its 8th wholly owned subsidiary Central Mine Planning & Design Institute Limited (CMPDIL) provides exploration, planning and technical support to all the 7 production subsidiaries. CIL also has a wholly owned subsidiary in Mozambique, Coal India Africana Limitada (CIAL) for pursuing coal mining opportunities in that country.

Shareholding Pattern

The Shareholding Pattern page of Coal India Ltd. presents the Promoter's holding, FII's holding, DII's Holding, and Share holding by general public etc.

Holder's Name No of Shares % Share Holding

No of Shares 6162728327 100%

Promoters 4075634553 66.13%

Foreign Institutions 406414679 6.59%

Banks/Mutual Funds 564832361 9.17%

Central Govt 5747675 0.09%

Others 88638866 1.44%

General Public 276679751 4.49%

Financial Institutions 744780442 12.09%

FY2023 Q4 and Full Year results

Coal India on Sunday reported 17.7 per cent drop in its March quarter net profit on higher provision made for wage revision of employees.

Consolidated net profit of Rs 5,527.62 crore, or Rs 8.98 per share, in January-March is compared with Rs 6,715 crore, or Rs 10.86 a share earning in the same period a year back, according to the company's filing with stock exchanges.

The decline in profit in the fourth quarter of 2022-23 (April 2022 to March 2023) was despite coal production and dispatches to users.

The company said salaries for non-executives are due for revision from July 1, 2021 and pending finalisation of a wage agreement with unions, a provision of Rs 5,870.16 crore has been made in the quarter.

This is compared with Rs 475.28 crore provision in January-March 2022. For the full 2022-23 fiscal, Coal India made a provision of Rs 8,152.75 crore as against Rs 1,080.97 crore provided in the previous 2021-22 financial year.

Coal production rose 7 per cent to 224.16 million tonne in the quarter ended March 31. Offtake increased to 186.877 million tonne in the quarter as compared to 180.249 million tonne in the period ended March 31, 2022.

The company board of directors declared a Rs 4 per share final dividend for the fiscal. The firm had previously declared Rs 15 a share and Rs 5.25 per share interim dividends.

Sale was up at Rs 35,161.44 crore in Q4 from Rs 29,985.45 crore a year back. Coal India has been in negotiations with the employee unions for wage revision. Workers are seeking a 47 per cent increase in wages while Coal India has offered a 3 per cent raise.

Its salary bill was Rs 49,409 crore in the 12 months ended March, about 22 per cent higher from the previous year. The company, which is facing higher production costs, spent more than a third of its revenue on salaries.

Wages of non-executive workers, which account for 94 per cent of Coal India's workforce, are revised every five years. The hike is due from July 2021. In 2017, CIL signed a wage agreement with worker unions proposing a 20 per cent hike in salaries for five years.

Coal India has a total workforce of 2.59 lakh. Out of this, around 15,000 are executive staff. Later in a statement, the firm said net profit for FY 2022-23 posted a massive 62 per cent growth at Rs 28,125 crore.

"This was despite provisioning Rs 8,153 crore in the accounts in 2022-23 towards wage revision of CIL's non-executive manpower," the company said.

This is the company's highest ever net profit, beating the previous best of Rs 17,464 crore in 2018-19. The net profit in Q4 shrunk "primarily due to increased provision towards the wages," it said. "PAT would have been the highest ever profit in any quarter had the provision not been made."

The profits rose despite the company capping its coal prices for over the past five years amidst rising input costs, especially diesel and explosives and increased wage cost due to provisioning in the accounts.

Though e-auction sales at 16.40 million tonne were lower by 41 per cent in volume terms in Q4 compared to 27.65 million tonne of similar quarter in FY22, higher premiums under the e-window helped CIL in cranking up e-auction sales by Rs 690 crore, the statement said.

"The realization per tonne of coal was Rs 4,526 under auction segment in Q4 against Rs 2,434 in the same quarter of FY22. The jump was Rs 2,092 per tonne or 86 per cent."

Brokerage Outlook

COAL displayed strong performance on sales volume over last six months. However, delay in price hike of FSA (85% total volumes) remained a dampener. Though delayed, we believe that price hike is inevitable in wake of steep rise in global prices, significant increase in costs and a long gap of almost four years since last increase.

On the balancing side, strong pick-up in E-auction realisations helped to negate the absence of increase in FSA prices partially. Underpinned by improved operational performance and better outlook on both FSA and E-auction prices, Prabhudas Lilladher, Brokerage maintain Accumulate rating with TP of Rs172., EV/EBITDA of 3.0x FY23e.

ESG

We are committed to create a clean and healthy ecosystem concomitantly with our mining operations to minimize adverse environmental impacts.

Our efforts to improve ecological footprint and environmental protection measures are backed by advanced technology and infusion of requisite finance for concrete action.

• Keeping the environmental footprint to a minimum;

• Ensuring optimum production of coal;

• Minimizing the risks of contamination of soil and groundwater;

• Minimizing energy demand in mining operations;

• Minimizing particulate matter (dust) and exhaust gases;

• Increasing environmental and health awareness.