Coal India says on track to increase output this year

MUMBAI Fri Nov 9, 2012 8:09pm IST

Labourers load coal on trucks at Bari Brahamina in Jammu May 20, 2010. REUTERS/Mukesh Gupta/Files

Labourers load coal on trucks at Bari Brahamina in Jammu May 20, 2010.

Credit: Reuters/Mukesh Gupta/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - Coal India, the world's largest coal producer, posted a 19 percent rise in second-quarter profits on Friday and said it expects to step up production this year after years of sluggish output.

The state-controlled miner, which produces about 80 percent of India's coal, is under pressure to ease energy shortages at home but has struggled for years to raise output due to problems in obtaining environmental and regulatory approval. Output levels have remained nearly flat for the past two years and it missed its production target last year.

The company is aiming to supply 464 million tonnes of coal this fiscal year ending next March, an increase of about 7 percent, and said on Friday production in the fiscal second quarter which ended in September was up 11 percent at 89.1 million tonnes, after taking additional steps to maintain output despite heavy monsoon rains.

"I am confident. We expect to maintain our target despite constraints," Chairman S. Narsing Rao told reporters in Kolkata after the results on Friday.

Coal India said its net profit in the three months to end-September rose to 30.8 billion rupees, short of the average forecast of 32.2 billion rupees given in a Reuters poll of analysts.

Net sales rose 11 percent to 146 billion rupees, which compared with an average forecast of 149 billion.

Coal India, the country's fifth-largest company by market value, has been a favourite with investors, despite underperforming the main stock index this year. Twenty-nine of the 40 analysts covering Coal India rate the stock a 'buy' or 'strong buy', according to Thomson Reuters Starmine data.

PRICES

Coal India has been able to charge higher prices to some customers after changing its pricing system this year, even though international coal prices have fallen by nearly 30 percent.

The company still prices domestic coal at 45 to 70 percent below international prices, in part to keep costs low for power producers, its main customers but India's business tycoons have been pressing the government to help with supplying the generators with more coal, to help solve the country's power shortages.

Earlier this year the miner agreed to supply a minimum of 80 percent of the coal needed for 48 new power projects, but has indicated it may need to import some of the fuel.

Shares in Coal India, valued at nearly $40.7 billion, closed 0.7 percent lower ahead of the results. The stock has risen nearly 16 percent so far this year, compared with a 22 percent rise in the main stock index.

(Additional reporting by Sujoy Dhar in Kolkata; Editing by Greg Mahlich)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Diplomacy

REUTERS SHOWCASE

Maruti Results

Maruti Results

Maruti Suzuki says profits helped by sentiment, not growth.  Full Article 

Tracking the Monsoon

Tracking the Monsoon

Monsoon turns patchy after revival.  Full Article 

ICICI Profit Up

ICICI Profit Up

ICICI Bank Q1 net profit up 17 percent, beats estimates.  Full Article 

Pharma Sector

Pharma Sector

FDA raises concern over drug production process at Cadila  Full Article 

Coal India

Coal India

Some Coal India mines may be run by foreign firms - minister  Full Article 

Fuel Prices

Fuel Prices

IOC to cut petrol prices by 1.5 pct from Friday  Read 

Economic Pulse

Economic Pulse

India's infrastructure output growth hits 9-month high in June  Full Article | Related Story 

Joint Bid

Joint Bid

ONGC, Oil India bid $1.5 bln for stake in Murphy Oil's Malaysia assets - sources  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage