Coal India misses profit view as costs rise amid strong demand
Coal India, the world’s largest producer of the raw material, reported a smaller-than-expected rise in quarterly profit on Thursday as rising costs overpowered strong demand.
Coal India reported a 53% rise in consolidated net profit to 65.16 billion rupees ($683.7 million) for the July-September quarter, missing analysts’ estimate of 70.61 billion rupees, as per data compiled by LSEG.
The state-owned miner produces about three-fourths of India’s coal.
Coal India faced cost pressures from higher employee expenses, increased spending to access coal in deeper and newer mines, and growing investment in rail and mine infrastructure.
Net profit margin narrowed to 17% from 22% a year earlier.
The company does not disclose mining costs but total expenses climbed 17% to 383.98 billion rupees. Demand remained robust, with India’s coal-fired power generation growing 13% year-on-year in the quarter.
Sales to customers rose 12%, outpacing 3.8% growth in production.
Average realisation from so-called e-auctions stood at 3,082.21 rupees per ton, higher than 2,973.32 rupees a year ago. Overall average price realisation of coal rose by 159.43 rupees.
Around 10% of Coal India’s sales are made through e-auctions, which typically fetch near-market prices, the remainder is supplied under long-term contracts.