12 August 2014
1 Q FY15 Results Update | Sector:
Utilities
Coal India
BSE SENSEX
25,881
Bloomberg
Equity Shares (m)
M.Cap. (INR b) (USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
S&P CNX
7,727
COAL IN
6,316.4
2,301/37.6
424/238
-3/8/-4
CMP: INR364
TP: INR409
Neutral
Financials & Valuation (INR b)
Y/E Mar
Net Sales
EBITDA
Adj PAT
EPS (INR)
Gr. (%)
BV/Share
(INR)
RoE (%)
RoCE (%)
P/E (x)
P/BV (x)
2015E 2016E 2017E
729.2
188.7
174.9
27.7
9
78
38.1
37.8
13.2
4.7
779.0
210.7
190.7
30.2
9
90
35.8
36.2
12.1
4.0
837.5
238.3
210.3
33.3
10
104
34.3
35.8
10.9
3.5
1QFY15 performance in-line:
Coal India reported consolidated 1QFY15 revenue at
INR178b, in-line with our estimate of INR177b. While reported revenue are in-line
with estimate, it is driven by higher E-auction revenue, and contribution from FSA
remains low. EBIDTA for the quarter too was in-line at INR42.8b, vs estimate of
INR44.5b. Interest, depreciation and other income too were in-line leading to PBT
of INR60b, vs estimate of INR61.8b. PAT for the quarter thus stood at INR40.2b,
in-line with estimate of INR41.8b.
E-auction volume, realization aid profitability:
FSA volumes stood at 99m (vs est
of 103m tons), while realization stood at INR1,320/ton (vs est of INR1,300/ton). E-
auction volumes stood higher at 16.8m tons (vs 13.2m ton YoY, est of 13m tons),
while realization improved to INR2,246/ton (vs est of INR2,175/ton and
INR2,140/ton QoQ). Washed coal volumes came at 3m tons (vs est of 3.8m tons)
while realization stood firm at INR2,393/ton (vs est of INR2,250/ton and
INR2,117/ton YoY). While overall revenue was in-line, lower FSA revenue was
made good owing to better contribution from E-auction.
Valuation and view:
We expect COAL to report net profit of INR175b for FY15E
(up 9.4% YoY) and INR191b for FY16E (up 9% YoY). Stock trades at PER of 12.1x
and P/BV of 4x on FY16E basis (RoE of 24% YoY). Re-iterate
Neutral.
Nalin Bhatt
(NalinBhatt@MotilalOswal.com); +91 22 3982 5429
Investors are advised to refer through disclosures made at the end of the Research Report.

Coal India
1QFY15 performance in-line estimate
Coal India reported revenues of INR178b, up 8% YoY and in-line with our
estimate of INR177b. Dispatch for the quarter stood at 120m tons (up 4% YoY),
vs estimate of 122m tons. Production for the quarter stood at 108m tons (up 5%
YoY). Volumes growth remained muted despite robust demand for power in
1QFY15. Average realization for the quarter was INR1,488/ton, vs estimate of
INR1,447/ton.
Average realization was driven by better revenue from E-auction, while FSA
revenue remained muted.
Operating expenses for the quarter stood at INR135b, in-line with our estimate
of INR132.3b. All major cost items were in-line with our estimate and staff cost
for the quarter stood at INR70.5b, flat QoQ.
EBIDTA for the quarter thus stood at INR42.8b, up 8% YoY and in-line with our
estimate of ~INR44.6b. EBIDTA/ton for the quarter stood at INR358/ton, vs
INR393/ton QoQ and INR343/ton YoY.
Interest, depreciation and other income were in-line with our estimate and PBT
for the quarter stood at INR60b vs estimate of INR61.8b.
PAT for the quarter thus stood at INR40.2b, in-line with estimate of INR41.8b.
PAT/ton stood at INR336/ton, down from INR406/ton QoQ and compares with
INR324/ton YoY.
FSA realization remain muted, Market linked revenues better than estimate
FSA revenues for the 1QFY15 stood at INR131b, up 3.4% YoY and marginally
lower than estimate of INR134b. This is led by lower volumes at 99.2m tons, vs
estimate of 103m tons.
E-auction revenues however stood higher at INR37.7b (vs estimate of INR28.3b),
up 33% YoY. Volumes stood robust at 16.8m tons (up 27% YoY), higher than our
estimate of 13.0m tons. Realization improved at INR2,246/ton, higher than our
estimate of INR2,175/ton and compares with INR2,140/ton QoQ and YoY.
Washed coal revenues stood at INR7.1b, flat YoY, lower than estimate of
INR8.4b.
FSA realization remained range bound at INR1,320/ton, vs INR1,410/ton QoQ
and INR1,296/ton YoY. Media reports indicate that COAL is contemplating 5-10%
hike to ward off cost. This is key monitorable in near term.
Washed coal realizations marginally down QoQ
Volumes (m tons)
Realization (INR/ton)
E-Auction realization firm up, as also volume
Volumes (m tons)
Realization (INR/ton)
4.6 3.7 2.6 8.9 4.0 3.3 3.4 6.2 3.3 3.2 4.0 3.6 3.3 3.2 3.4 3.0 3.0
Source: Company, MOSL
12 August 2014
Source: Company, MOSL
2

Coal India
FSA realization range bound
Volumes (m tons)
Realization (INR/ton)
85
83
96 93
88
79
94
102
95
87
106 110
98
92
98
109
99
Source: Company, MOSL
Valuations and view
We expect COAL to report net profit of INR175b for FY15E (up 9.4% YoY) and
INR191b for FY16E (up 9% YoY). Stock trades at PER of 12.1x and P/BV of 4x on
FY16E basis (RoE of 24% YoY). Re-iterate
Neutral.
12 August 2014
3

Coal India
Coal India: an investment profile
Company description
Coal India Limited (CIL) is a leading public sector
undertaking engaged into coal mining in India and is
working on establishing its footprint globally through
MoUs/acquisition route. CIL operates through its 9 wholly
owned subsidiaries, of which 1 subsidiary is engaged in
exploration and feasibility study analysis. CIL has total
resources of 64.3b tonnes and proved reserves of 52.4b
tonnes, of which extractable reserves stand at 21.7b
tonnes.
Key investment risk
Large parts of India's coal reserves are located on
the Eastern belt, which has seen significant
increase in Naxalite movement.
CIL has been facing headwinds for its planned
expansion,
given
delays
in
requisite
environment/forest clearances and land
acquisition issues.
Decline in international coal prices and INR
appreciation could impact the E-auction/washed
coal realization.
Key investment positives
CIL has access to 64.3b tonnes of resources, the
largest in the world. Of this, 52.4b tonnes are proven
based on Indian Standard Procedure (ISP) guidelines,
representing ~ 6% share of the global proven reserves.
Possible price hike could be a positive development
and would help in absorbing the increase in
employee/contractual and fuel cost.
Washed coal capacity is being ramped up from 39.4m
to over 111m tons with addition of 20 new facilities
Recent development
COAL India has fixed production/dispatch target
at 507/520m tons in FY15E.
Valuation and view
We expect COAL to report net profit of INR175b
for FY15E (up 9.4% YoY) and INR191b for FY16E
(up 9% YoY). Stock trades at PER of 12x and
P/BV of 4x on FY16E basis (RoE of 24% YoY). Re-
iterate
Neutral.
Target price and recommendation
Current
Price (INR)
364
Target
Price (INR)
409
Upside
(%)
12.4
Reco
Neutral
EPS: MOSL forecast v/s consensus (INR)
MOSL
Forecast
FY15
FY16
27.7
30.2
Consensus
Forecast
26.9
30.2
Variation
(%)
3.0
0.0
Shareholding pattern (%)
Jun-14
Promoter
DII
FII
89.7
2.8
5.5
Mar-14
89.7
2.9
5.3
2.1
Jun-13
90.0
2.3
5.4
2.4
Stock performance (1-year)
Others
2.0
Notes: FII includes depository receipts
12 August 2014
4

Coal India
Financials and valuations
Income statement
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Reported PAT
Adjusted PAT
Change (%)
Consolidated PAT
2014
688,100
1
159,632
23.2
19,964
139,668
580
89,694
-14
228,795
77,679
34.0
151,116
159,881
-9
159,881
2015E
729,191
6
188,663
25.9
20,169
168,494
375
90,738
0
258,857
83,986
32.4
174,871
174,871
9
174,871
(INR Million)
2016E
778,952
7
210,693
27.0
21,429
189,264
353
93,308
0
282,219
91,566
32.4
190,653
190,653
9
190,653
2017E
837,544
8
238,274
28.4
22,791
215,483
332
96,134
0
311,286
100,997
32.4
210,289
210,289
10
210,289
Ratios
Y/E Mar
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Cash P/E
Price / Book Value
EV/Sales
EV/EBITDA
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios (%)
Asset Turnover (x)
Debtors (No. of Days)
Inventory (No. of Days)
Creditors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
2014
25.3
28.5
67.1
30.0
165.9
14.4
12.8
5.4
2.6
11.1
8.2
33.3
31.7
1.5
43.7
29.5
0.0
0.0
2015E
27.7
30.9
78.2
13.8
70.0
13.2
11.8
4.7
2.5
9.5
3.8
38.1
37.8
1.6
43.7
29.5
0.0
0.0
2016E
30.2
33.6
90.3
18.1
70.0
12.1
10.9
4.0
2.2
8.2
5.0
35.8
36.2
1.5
43.7
29.5
0.0
0.0
2017E
33.3
36.9
103.6
20.0
70.0
10.9
9.9
3.5
2.0
7.0
5.5
34.3
35.8
1.4
43.7
29.5
0.0
0.0
Balance sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Curr. Liabilities
Provisions
Net Current Assets
Total Assets
2014
63,164
360,881
424,045
1,715
-19,717
406,678
439,893
263,804
176,089
14,913
37,749
793,955
55,681
82,410
523,895
131,969
616,028
499,790
116,238
177,927
406,678
2015E
63,164
430,829
493,993
9,523
-19,717
484,435
494,749
272,898
221,851
40,343
16,183
901,667
59,006
87,332
517,886
237,444
695,609
564,482
131,127
206,058
484,435
(INR Million)
2016E
2017E
63,164
63,164
507,090
591,206
570,254
654,370
8,952
8,415
-19,717
-19,717
560,125
643,703
555,091
621,467
282,807
293,610
272,285
327,857
46,127
51,340
16,992
17,842
986,317 1,082,538
63,032
67,774
93,291
100,308
573,529
634,864
256,464
279,592
761,596
835,873
618,502
678,086
143,095
157,787
224,721
246,665
560,125
643,703
E: MOSL Estimates
Cash flow statement
Y/E Mar
OP/(Loss) before Tax
Depreciation
Others
Interest
Direct Taxes Paid
(Inc)/Dec in Wkg Cap
CF from Op. Activity
(Inc)/Dec in FA & CWIP
(Pur)/Sale of Invt
Others
CF from Inv. Activity
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Interest Paid
Divd Paid (incl Tax)
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
(INR Million)
2014
2015E
2016E
2017E
228,809 258,857 282,219 311,286
19,964
20,169
21,429
22,791
0
0
0
0
580
375
353
332
-77,679 -83,986 -91,566 -100,997
3,625 -34,141
36,981
39,390
175,300 161,275 249,416 272,802
-29,739 -80,287 -66,126 -71,589
-13,799
21,566
-809
-850
0
0
0
0
-43,539 -58,721 -66,935 -72,438
15,598
0
0
0
-9,063
7,809
-571
-537
-580
-375
-353
-332
-227,389 -104,922 -114,392 -126,173
-229,200 -108,564 -126,837 -117,184
-97,439
-6,010
55,644
83,180
622,360 523,895 517,886 573,529
524,921 517,885 573,529 656,709
12 August 2014
5

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Analyst ownership of the stock
COAL INDIA
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