CIL Likely to Fall Behind FY17 Sales Target on Lower Off-Take by Power Sector

From what appears from the coal off-take scenario, Coal India Limited (CIL) is likely to miss its sales target for FY17.

Slow demand for coal from the power sector could be attributed for the expected slippage in the sales target for the fiscal by the state-run miner, which had already fallen behind by more than 40 MnT in its sales target for the first eight months of FY17.

During the Apr-Nov’16 period, CIL sold 340.3 MnT against the target of 381.6 MnT. CIL also had failed to achieve its production target of 360.8 MnT for the period, producing 323.6 MnT.

Speculating the demand-supply scenario for the next four months in the fiscal, it appears difficult for the coal major to even attain its production target of 597.6 MnT as there is no indication of the power producers in the country to increase coal purchases.

Poor financial health of power distribution companies has been cited as the reason behind the low coal demand .