5 September 2020
1QFY21 Results Update | Sector: Utilities
Coal India
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
COAL IN
6,207
815.9 / 11.4
218 / 119
1/-26/-32
1788
CMP: INR132
TP: INR190 (+44%)
Buy
Negative operating leverage kicks in
Valuations attractive; Dividend yield of ~10%
Coal India’s (COAL) 1QFY21 results highlight the impact of lower volumes/
e-auction realizations amid subdued thermal power demand. Adj. EBITDA
(ex-OBR) was down 63% YoY.
Muted power demand has impacted off-take and e-auction realizations.
However, we expect Coal India to tide over the situation given its large cash
position (Net cash: ~INR230b). Maintain
Buy
with target price of
INR190/share based on 3.5x Sep’21 EV/EBITDA.
EBITDA declines 63% YoY on lower volumes and e-auction realizations
1QFY21 Adj. EBITDA (ex-OBR) was down 63% YoY to INR28b (in-line) on
account of lower off-take/e-auction realizations. While FSA realization at
INR1,359/t was below our est. INR1,400/t, it was offset by higher mix of e-
auction volumes at 15.9mt (v/s est. 13.1mt).
Revenue declined 26% YoY to ~INR185b (v/s est. INR194b). Overall off-take
was down 22% YoY to 120.4mt given the lower power demand. Production
was down 12% YoY to 121mt. Cash cost (ex-OBR) rose 15% YoY to
INR1,180/t.
FSA:
FSA volumes declined 22% YoY to 102.2mt (v/s est. 103.5mt); FSA
realization was down 1% YoY to INR1,359/t (v/s est. INR1,400/t).
E-auction:
E-auction volumes declined 17% YoY to 15.9mt (v/s est. 13.1mt);
E-auction realization was down 26% YoY to INR1,598/t (v/s est. INR1,600/t).
The company reported write-backs of INR2.5b on OBR (v/s est. INR9.6b
expense) amidst strong focus and higher stripping ratio. This led to a beat
on our reported PAT numbers. Overall, PAT was down 55% YoY to INR20.8b
(v/s est. INR13.4b).
Management commentary: Receivables situation slowly improving
COAL’s management has noted that the company’s receivables have
increased to INR230b in 1QFY21 from INR178b at end-FY20. However, these
receivables have decreased to INR210b at end-Aug’20. COAL expects the
situation on receivables to improve further and normalize from Oct’20.
COAL is focusing on import substitution and targeting ~100mt under the
same. It is planning ~75mt of coal for the Non-Regulated Sector (NRS) and
would seek to provide better quality of coal.
Valuations attractive; Maintain Buy
Volumes and e-auction realizations have been under pressure on decline in
power demand and significant stocks at both mines and power plants.
However, power demand is showing signs of improvement and we expect
volumes to recover in 2HFY21.
Furthermore, we expect Coal India to tide over the current situation given
its large cash position (Net cash: ~INR230b). The stock trades attractively at
~1.6x FY22E EV/adj. EBITDA (v/s historical average of 7x), P/E of 5x (v/s
average of ~13x) and offers a dividend yield of ~10%. Maintain
Buy
with a
target price of INR190/share.
Financials & Valuations (INR b)
Y/E MARCH
2020 2021E 2022E
Sales
960.8 891.2 1,052.2
EBITDA
219.2 150.9 245.1
Adj. PAT
167.0 110.1 177.1
EBITDA Margin (%)
22.8 16.9
23.3
Cons. Adj. EPS (INR)
27.1 17.9
28.7
EPS Gr. (%)
-4.4 -34.1
60.9
BV/Sh. (INR)
52.2 58.4
73.7
Ratios
Net D:E
-0.7
-0.6
-0.7
RoE (%)
51.9 30.6
39.0
RoCE (%)
56.4 30.3
40.9
Payout (%)
53.3 65.0
47.0
Valuations
P/E (x)
5.2
7.4
4.6
P/BV (x)
2.7
2.3
1.8
EV/EBITDA(x)
2.3
3.0
1.6
Div. Yield (%)
8.6
8.8
10.2
FCF Yield (%)
-1.8
4.5
22.2
Shareholding pattern (%)
As On
Jun-20 Mar-20
Promoter
66.1
66.1
DII
22.3
22.1
FII
7.9
8.2
Others
3.7
3.6
FII Includes depository receipts
Jun-19
71.0
17.4
9.0
2.7
;
Aniket Mittal – Research Analyst
(Aniket.Mittal@MotilalOswal.com)
13 February 2020
1
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
 Motilal Oswal Financial Services
Coal India
Quarterly performance (consolidated) – INR m
Y/E March
Sales
Change (%)
Adj. EBITDA
As of % Sales
Depreciation
OBR
Interest
Other Income
EO Inc/(Exp)
PBT
Tax
Tax Rate (%)
Reported PAT
Adjusted PAT
Change (%)
1Q
249.4
3.6
75.1
30.1
7.3
9.0
0.2
11.5
0.0
70.1
23.8
34.0
46.3
46.3
22.4
FY20
2Q
3Q
203.8 231.9
-6.9
-7.4
42.5
61.8
20.8
26.7
7.9
8.9
6.4
12.1
1.7
1.5
16.3
14.1
0.0
0.0
42.8
53.3
7.5
14.1
17.6
26.5
35.2
39.2
35.2
39.2
14.2
-14.1
4Q
275.7
-3.4
95.2
34.5
10.3
27.9
1.7
19.1
0.0
74.5
28.2
37.9
46.3
46.3
-23.2
1Q
184.9
-25.9
28.0
15.1
8.5
-2.5
1.8
7.9
0.0
28.0
7.2
25.8
20.8
20.8
-55.1
FY21
2Q
175.2
-14.0
26.0
14.8
8.3
5.8
1.7
9.9
0.0
20.2
5.1
25.0
15.2
15.2
-57.0
FY20
3Q
237.6
2.5
63.2
26.6
9.3
11.0
1.5
8.6
0.0
50.0
12.5
25.0
37.5
37.5
-4.3
4Q
293.5
6.5
83.7
28.5
9.8
35.8
0.0
10.8
0.0
48.9
12.3
25.1
36.6
36.6
-20.8
960.8
-3.5
274.6
28.6
34.5
55.4
5.0
61.1
0.0
240.7
73.7
30.6
167.0
167.0
-4.4
FY21E
FY21
var
1QE
(%)
891.2
194.0
(5)
-7.2
-22.2
200.9
28.2
(1)
22.5
14.5
35.9
7.6
12
50.0
9.6
5.1
0.2
37.3
7.0
12
0.0
0.0
147.2
17.8
57
37.1
4.5
62
25.2
25.0
110.1
13.4
56
110.1
13.4
56
-34.1
-71.1
Source: MOFSL, Company
FY21
1QE
121.0
120.6
103.5
13.1
3.2
0.8
1,400
1,600
3,100
3,200
var.
(%)
0
(0)
(1)
21
(46)
(58)
(3)
(0)
(14)
10
Exhibit 1:
Key Operating Parameters
Y/E March
1Q
Volume (m tons)
Production
Sales/Offtake
- FSA
- E-auction
- Washed Coal
- others
Realisation (INR/t)
- FSA
- E-auction
- Washed Coal
- others
Per ton (INR)
Revenue
cash EBIDTA
PAT
Costs
136.9
153.5
130.3
19.1
3.1
0.8
1,370
2,155
3,171
3,644
1,513
489
302
1,024
FY20
2Q
104.0
122.4
103.8
15.5
2.3
0.7
1,438
2,019
2,951
3,832
1,551
347
288
1,204
3Q
147.5
141.6
127.7
9.8
2.3
1.7
1,411
2,623
2,667
2,060
1,523
437
277
1,086
4Q
213.7
163.9
139.2
21.0
3.3
0.6
1,446
2,105
2,548
3,643
1,562
581
282
981
1Q
121.0
120.4
102.2
15.9
1.7
0.3
1,359
1,598
2,668
3,506
1,412
232
173
1,180
FY21
2Q
100.6
113.1
81.8
28.2
2.4
0.7
1,383
1,426
2,919
3,214
1,437
230
134
1,207
FY20
3Q
142.7
151.4
134.5
12.8
2.4
1.7
1,423
1,575
2,638
2,807
1,471
417
248
1,054
4Q
217.6
180.0
146.1
28.2
4.9
1.0
1,450
1,599
2,869
3,372
1,525
465
203
1,060
601.6
581.1
501.0
65.4
11.0
3.7
1,416
2,177
2,831
2,957
1,538
473
287
1,065
582.0
565.0
464.7
85.2
11.4
3.7
1,410
1,538
2,800
3,100
FY21E
1,469
1,478
(4)
356
234
(1)
195
111
56
1,113
1,245
(5)
Source: MOFSL, Company
Exhibit 2: CIL Valuation
Adjusted EBIDTA
Target EV/EBITDA (x)
Target EV
Net debt
Equity value
TP (INR/share)
FY18
203,089
FY19
300,483
FY20E
274,627
3.5
961,195
-235,315
1,196,510
FY21E
200,919
3.5
703,217
-221,425
924,642
FY22E
307,050
3.5
1,074,675
-337,535
1,412,210
1,168,426
190
Source: MOFSL, Company
-311,085
-316,302
5 September 2020
2
 Motilal Oswal Financial Services
Coal India
Exhibit 3: Adjusted P&L
Revenue
Power FSA
Non Power FSA
Eauction/MoU
Sales (mt)
YoY (%)
Power FSA
Share (%)
Non Power FSA
Eauction/MoU
Revenue per ton
YoY (%)
Power FSA
Non Power FSA
Eauction/MoU
Cost of Mining (ex. OB)
CoP per ton
YoY (%)
Labor & social OH
Contract
R&M
Others
Adjusted EBIDTA
EBITDA per ton
FY18
858,624
549,091
62,000
247,533
580
6.8
424
73
36
120
1,480
2.6
1,295
1,723
2,062
655,535
1,130
-3.1
616
220
143
151
203,089
350
FY19
995,469
640,826
124,788
229,856
608
4.9
458
75
67
83
1,637
10.6
1,399
1,851
2,777
694,986
1,143
1.1
644
220
144
134
300,483
494
FY20E
960,803
624,312
142,822
193,669
581
-4.5
426
73
75
80
1,653
1.0
1,465
1,904
2,418
686,176
1,181
3.3
688
239
146
108
274,627
473
FY21E
FY22E
891,198
1,052,230
594,379
722,346
111,515
157,924
185,304
171,960
565
665
-2.8
17.7
405
494
72
74
60
85
100
86
1,577
1,582
-4.6
0.3
1,469
1,463
1,859
1,858
1,848
1,994
690,279
745,180
1,222
1,121
3.5
-8.3
704
606
265
243
146
136
107
136
200,919
307,050
356
462
Source: MOFSL, Company
Management call highlights
The company is focusing on OBR, which would help it to increase production in
the coming months. It is targeting OB removal of ~1,500mt in FY21.
Receivables have increased to INR230b in 1QFY21 from INR178b at end-FY20.
However, these receivables have decreased to INR210b at end-Aug’20. COAL
expects the situation to continue improving and normalize Oct’20 onwards.
The company is focusing on import substitution. It is targeting ~100mt of
substitution. It is planning ~75mt of coal for the Non-Regulated Sector (NRS) and
would seek to provide better quality of coal.
COAL is targeting production and off-take of 660mt for FY21 (v/s earlier target of
710mt).
COAL has witnessed a premium of 9% on its e-auction sale in Aug’20. It will
review the base price under e-auction at end-Sep’20 based on market
conditions. It plans to sell 20% of its volumes under e-auction.
The company has identified ~23 mines, which are producing <50,000t/ year and
will either look to improve their productivity or seek closure. Labor at these
mines would be transferred to other places.
COAL believes that it does not need any coal block allocation. It is tendering
contracts for ~53 projects with average capacity of 3mt each. Besides, it has
identified 15 mines, which can give ~150mt production at peak levels. Also, the
company is looking at increasing production through higher EC at its existing
mines.
Capex target for FY21 stands at INR100b. COAL has incurred capex of INR30b up
to Aug’20 YTD.
Wage revision is scheduled for July next year and the company would start
negotiations for the same in Mar-Apr’21.
COAL would try to maintain dividend at the same level as previous year.
5 September 2020
3
 Motilal Oswal Financial Services
Coal India
Valuation and view
India’s dependence on coal to continue
India continues to depend on coal for ~70% of its electricity requirement – with
coal-based generation forming 55% of the country’s installed capacity (Coal:
205GW; All India: 370GW). Despite the increased focus on renewables, coal
would continue to dominate India’s electricity production. We note: per capita
electricity consumption in India remains low (1/16
th
of the US; 1/5
th
of China and
1/3
rd
of the world average), implying significant room for coal and renewables to
co-exist and grow. Assuming 6.5% CAGR of power demand growth over FY20-25
and average annual 14GW of renewable capacity addition (at 20% PLF),
incremental renewable generation would be just 115BU, which is not sufficient
to even meet the overall incremental demand (419 BU) over the next five years.
We expect coal-based generation to increase at CAGR of 6.5% over the same
period, driving the need for coal in India. From a domestic perspective, we do
not expect the government’s initiative to increase participation in commercial
coal mining to dent production for Coal India. Given the procedural hurdles such
as land acquisition and EC/FC clearances, output from such commercial mines
will take time. Moreover, although Coal India accounts for ~80% of domestic
coal production, it meets only ~70% of the domestic demand. Thus, there exists
massive opportunity for import substitution (~110-150mt of imported coal can
be substituted). As and when, commercial mines come up it would likely
displace these imports.
Near-term headwinds; Negative operating leverage kicked in
Volumes and e-auction realizations have been under pressure. India’s lock down
given COVID-19 came at a time when (a) power demand was largely muted, and
(b) production at Coal India’s mines ramped up post the heavy monsoon season.
Accordingly, inventory at both coal mines and power plants was high.
Large proportion of Coal India’s costs is fixed in nature with employee costs
accounting for ~50% of the company’s expenses. Further, with the company
focusing on OBR removal activities, COAL would continue to utilize contractual
employees, in our view. Thus, with lower dispatches, negative operating
leverage has kicked in. However, power demand has shown signs of
improvement and we expect volumes to recover in 2HFY21.
Valuations attractive; Dividend yield of ~10%
Working capital has stretched with elevated receivables as cash issues due to
lower demand materialized within the power value chain. However, we expect
Coal India to tide over this situation given its large cash position (Net cash:
~INR230b). The stock trades attractively at ~1.6x FY22E EV/adj. EBITDA (v/s
historical average of 7x), P/E of 5x (v/s average of ~13x) and offers a dividend
yield of ~10%. Maintain
Buy
with a target price of INR190/share.
5 September 2020
4
 Motilal Oswal Financial Services
Coal India
Story in Charts
Exhibit 4: Expect production to remain steady in the near
term
Production (m ton)
Exhibit 5: FSA realizations have improved…
FSA
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 6: …but, we build in lower e-auction realizations…
E-auction
Exhibit 7: …which could keep revenue under check
Revenue (INR b)
1,052
995 961
891
859
515
741
780 784
639 698
706
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 8: Negative operating leverage to kick in FY21…
Labor & social OH
Contract
R&M
Others
1,166
1,130
1,123 1,181 1,222 1,121
1,051
1,082 1,056
995 1,013
108 107
120 109 161 151 114 146 146 136
122 138 132 171 155 152 143 144
265 136
142
148 170
227 220 220 239
243
113 125 145 174 208
617 602 604 617 584 626 616 644 688 704 606
Exhibit 9: …expect adj. EBITDA (ex- OBR) to recover in FY22E
Adj. EBITDA - INR b
300
175
208 228 210 212 215
151
203
275
201
307
148
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 10: Dividend yield remains attractive…
40
30
20
10
10
0
14
29
21
27
20
17
13
12
12
14
5
3
DPS (INR/sh)
10
9
6
7
6
Dividend yield (%)
10
9
6
9
12
10
8
6
4
2
0
Exhibit 11: The stock trades attractively at significant
discount to historical valuations
24
P/E (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
21.8
16.8
19
14
9
4
13.3
9.7
6.3
6.3
Source: MOFSL, Company
Source: MOFSL, Company
5 September 2020
5
 Motilal Oswal Financial Services
Coal India
Financials and Valuations
Income Statement
Y/E March
Net Sales
Change (%)
EBITDA
% of Net Sales
Depreciation
Interest
Other Income
Extra Ordinary
PBT
Tax
Rate (%)
PAT before Min. Int.
Minority Interest
Reported PAT
Change (%)
Adjusted PAT
Change (%)
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Minority Interest
Loans
Defferd tax Liabiity
Capital Employed
Gross Fixed Assets
Less: Depreciation
Net Fixed Assets
Capital Work in Progress
Investments
Current Assets
Inventory
Debtors
Other Current Assets
Loans and Advances
Cash
Current Liabilities
Payables
Other current liabilities
Net Curr. Assets
Application of Funds
FY15
741,201
5.0
173,354
23.4
23,198
73
65,706
-50
215,839
78,573
36.4
137,266
137,266
-9.2
137,266
-14.1
FY16
780,073
5.2
187,309
24.0
28,259
3,862
59,406
0
214,594
71,719
33.4
142,876
142,876
4.1
142,876
4.1
FY17
783,719
0.5
123,912
15.8
29,101
4,117
55,156
0
145,850
51,660
35.4
94,190
94,190
-34.1
94,190
-34.1
FY18
858,624
9.6
169,507
19.7
30,664
4,318
46,583
73,844
107,264
37,067
34.6
70,198
70,198
-25.5
118,942
26.3
FY19
995,469
15.9
249,771
25.1
34,504
2,750
58,737
0
271,255
96,625
35.6
174,630
174,630
148.8
174,630
46.8
FY20
960,803
-3.5
219,209
22.8
34,508
5,029
61,054
0
240,725
73,710
30.6
167,015
167,015
-4.4
167,015
-4.4
FY21E
891,198
-7.2
150,941
16.9
35,933
5,079
37,258
0
147,186
37,091
25.2
110,095
110,095
-34.1
110,095
-34.1
(INR M)
FY22E
1,052,230
18.1
245,087
23.3
37,358
5,130
34,183
0
236,782
59,669
25.2
177,113
177,113
60.9
177,113
60.9
(INR M)
FY22E
61,627
392,345
453,972
3,941
64,260
-33,110
489,063
663,802
223,689
440,113
127,714
4,622
1,125,291
92,250
129,727
490,106
11,412
401,795
1,208,677
87,366
1,121,311
-83,386
489,063
FY15
63,164
340,367
403,531
658
4,019
-19,591
388,617
448,080
286,929
161,150
51,594
873,074
61,838
85,219
61,808
105,150
559,060
697,201
9,208
687,994
175,873
388,617
FY16
63,164
285,168
348,332
1,048
11,921
-20,445
340,855
234,137
26,824
207,314
59,044
73
841,406
75,692
114,476
241,078
1,024
409,137
766,982
32,972
734,010
74,424
340,855
FY17
62,074
183,194
245,268
3,459
30,078
-27,328
251,477
276,883
55,984
220,900
103,078
106
809,377
89,453
107,359
285,187
358
327,021
881,984
39,002
842,981
-72,607
251,477
FY18
62,074
136,392
198,466
3,625
15,309
-53,551
163,849
325,733
84,805
240,928
137,710
3,443
839,286
64,439
86,892
351,324
10,238
326,394
1,057,518
45,169
1,012,348
-218,232
163,849
FY19
61,627
202,912
264,539
4,068
22,027
-42,692
247,943
401,631
115,888
285,742
136,984
4,622
857,149
55,839
54,986
391,553
16,441
338,330
1,036,554
68,155
968,399
-179,405
247,943
FY20
61,627
259,942
321,569
3,941
64,260
-33,110
356,660
473,802
150,397
323,405
127,714
4,622
1,011,365
66,189
144,082
490,106
11,412
299,575
1,110,445
101,076
1,009,370
-99,081
356,660
FY21E
61,627
298,475
360,103
3,941
64,260
-33,110
395,194
568,802
186,330
382,472
127,714
4,622
1,006,951
85,457
134,290
490,106
11,412
285,685
1,126,565
67,217
1,059,348
-119,614
395,194
5 September 2020
6
 Motilal Oswal Financial Services
Coal India
Financials and Valuations
Cash Flow Statement
Y/E March
Adj EBITDA*
Non cash exp. (income)
(Inc)/Dec in WC
Taxes paid
CF from Operations
Capex
Free Cash Flow
(Pur)/Sale of Investments
Interest/dividend
Other investing activity
CF from Investments
Equity raised/(repaid)
Debt raised/(repaid)
Interest paid
Dividend (incl. tax)
Other financing
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
Ratios
Y/E March
Adjusted EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Adj. EBITDA
Dividend Yield (%)
EV /ton of Reserves
Profitability Ratios (%)
Debtor (Days)
Inventory (Days)
Payables (Days)
Asset turnover(x)
Profitability Ratios (%)
RoE
RoCE
RoIC
Leverage Ratio
Net Debt/Equity (x)
FY15
211,621
21,428
6,487
-95,721
143,815
-49,014
94,801
9,615
52,871
-9,615
3,857
0
1,935
-73
-155,963
3,844
-150,257
-2,585
561,644
559,060
FY16
215,423
21,565
-26,697
-78,754
131,538
-57,857
73,681
-1
50,349
-3,344
-10,852
0
9,902
-207
-208,302
2,732
-195,874
-75,188
559,060
483,872
FY17
150,634
37,046
60,216
-89,427
158,469
-86,761
71,707
-50
34,642
-209
-52,379
-45,531
18,169
-306
-151,031
2,720
-175,980
-69,890
409,137
339,247
FY18
203,089
-54,587
138,450
-74,329
212,623
-85,293
127,330
-3,332
24,044
-297
-64,878
0
-14,778
-370
-123,238
2,513
-135,873
11,872
327,021
338,893
FY19
300,483
10,718
-48,918
-95,329
166,955
-73,393
93,561
-1,184
31,410
9,054
-34,114
0
6,718
-96
-112,110
3,972
-101,516
31,325
326,394
357,719
FY20
274,627
9,569
-123,268
-119,463
41,465
-56,120
-14,654
-4,539
34,573
9,055
-17,032
0
22,776
-686
-96,760
5,169
-69,502
-45,068
338,330
293,262
FY21E
200,919
10,930
-43,334
-37,091
131,424
-95,000
36,424
0
26,328
-68,672
0
0
-5,079
-71,562
-76,641
-13,889
299,575
285,685
(INR M)
FY22E
307,050
10,434
17,919
-59,669
275,733
-95,000
180,733
0
23,750
-71,250
0
0
-5,130
-83,243
-88,373
116,110
285,685
401,795
FY15
21.7
31.5
63.9
20.7
112.9
16.7
11.5
5.7
8.2
5.7
79.7
42.0
30.5
4.5
1.9
34.0
34.5
-45.5
-1.4
FY16
22.6
31.5
55.1
27.4
145.5
12.9
9.3
5.3
6.7
9.4
66.6
53.6
35.4
15.4
2.3
41.0
39.9
-60.6
-1.1
FY17
15.2
24.2
39.5
19.9
160.3
19.3
12.1
7.4
10.1
6.8
69.9
50.0
41.7
18.2
3.1
38.4
32.7
-40.0
-1.2
FY18
19.2
29.5
32.0
16.5
103.3
14.8
9.6
8.9
7.1
5.8
66.6
36.9
27.4
19.2
5.2
35.4
58.4
-37.7
-1.6
FY19
28.3
42.2
42.9
13.1
55.5
8.4
5.6
5.5
3.8
5.5
52.7
20.2
20.5
25.0
4.0
66.0
85.7
-51.7
-1.2
FY20
27.1
41.7
52.2
12.0
53.3
5.2
3.4
2.7
2.3
8.6
28.9
54.7
25.1
38.4
2.7
51.9
56.4
-83.4
-0.7
FY21E
17.9
31.8
58.4
11.6
65.0
7.4
4.2
2.3
3.0
8.8
27.3
55.0
35.0
27.5
2.3
30.6
30.3
-175.4
-0.6
FY22E
28.7
44.9
73.7
13.5
47.0
4.6
3.0
1.8
1.6
10.2
22.0
45.0
32.0
30.3
2.2
39.0
40.9
-457.7
-0.7
5 September 2020
7
 Motilal Oswal Financial Services
Coal India
NOTES
5 September 2020
8
 Motilal Oswal Financial Services
Coal India
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
5 September 2020
9
 Motilal Oswal Financial Services
Coal India
********************************************************************************************************************************
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in
nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in
all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
5 September 2020
10