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Web Exclusive | July 2013

Output of CIL grows 0.4% in June quarter

In the April-June 2013 quarter, output of Coal India (CIL) grew just 0.4 percent to 102.87 million tonne (mn t), raising doubts among investors about the firm's ability to meet target for 2013-14.

For the current financial year, the company aims to achieve 482 mn t of production and 492 mn of offtake. That translates into a year-on-year growth of 6.6 percent in production and 5.8 percent in offtake.

In order to attain the targets, CIL must clock an 8.4 percent growth in production and 7 percent growth in offtake for the rest of the year.

On account of the monsoon, the company's performance in the September quarter is generally muted. As a result, growth in the second half of the fiscal year will have to be relatively high for the company to achieve its targets.

The availability of sufficient number of rakes has a bearing on the company's ability to meet its offtake target. One of the reasons for the low growth in offtake last quarter was inadequate availability of rakes, some analysts feel.

Meanwhile, owing to rise in cost and a fall in realization from e-auctions, the company's margin is expected to be under pressure, analysts feel.

Some analysts expect coal demand from the FSAs (fuel-supply agreements) route to outpace supply as the company entered into FSAs for post-2009 power plants.

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