State-run Coal India Limited (CIL) seems to be bullish on its performance as there are enough prospects for coal consumption to go up in India during the second half of FY18.
Low coal stocks at thermal power plants in the country are the foremost among the growth drivers for CIL in the remaining months of FY18. According to the estimates in place, coal stocks at thermal power plants in the country have fallen to around 8 MnT in comparison with the average coal stock at around 26 MnT during FY17. At the same time, there is limited availability of rakes for the power plants in the country.
These two factors are expected to prompt the country’s thermal power plants to aggressively stock coal inventories in the coming months; that will raise coal off-take from CIL by around 8-9% during 2HFY18 on year-on-year basis.
Moreover, higher prices of imported coal are expected to raise coal prices in E-auctions, and that will increase the revenues of the coal major.
During 2QFY18, CIL produced 113 MnT of coal which was higher by 7% over the production of 106 MnT in 2QFY17. On quarter-on-quarter comparison, CIL’s production during the second quarter of FY18 was, however, lower by 5% against the production of 119 MnT in 1Q2018.
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