Coal India surpasses Q2 profit expectations amid high power demand

sxcoal.com Company, Cost & Profit 2023-11-14 08:55:04

Coal India Ltd., India's state-owned coal giant, reported a notable year-on-year increase of 12.5% in net profit for the second quarter of fiscal year 2023-24 (April 2023-March 2024), driven by robust power demand and increased production during a weak monsoon.

The consolidated net profits reached 68.0 billion rupees ($816.3 million) for the quarter ending September 30, the company said. This exceeded analysts' estimates of 63.70 billion rupees, Reuters reported, citing the LSEG data.

CIL's revenue also registered a marked rise of 9.8% to 327.76 billion rupees, surpassing analysts' expectation of 323.66 billion rupees. This growth was partly attributed to a 13.1% surge in raw coal production.

While total expenses rose by 9.4% to 260 billion rupees due to higher employee and contractual expenses, the company experienced a 15.1% reduction in raw material costs.

Its consolidated sales increased from 275.39 billion rupees in the July-September period of the previous fiscal to 299.78 billion rupees this fiscal.

India witnessed sustained high power demand during the reporting quarter, which typically peaks in May due to extreme summer heat.

In the second quarter, India's power demand reached a peak of 241 GW, surpassing the Central Electricity Authority's fiscal 2024 target of 230 GW. This growth was driven by a drop in hydropower generation by 11% due to reduced rainfall caused by the El Nino phenomenon.

To bridge the power deficit, thermal power generation played a crucial role, as nearly 75% of India's power generation relies on coal to meet the increased electricity demand.

The company had implemented an 8% price hike for high-grade non-coking coal in May, which was expected to generate an additional revenue of 27.03 billion rupees for the remaining fiscal period.

CIL, which accounts for over 80% of India's domestic coal output, continues to demonstrate resilience in meeting the country's power demands amid challenging weather conditions and evolving market dynamics.

(Writing by Riley Liang Editing by Emma Yang)
For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.

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