Professional Documents
Culture Documents
Coal India
Mining behemoth with pseudo-utility attributes
Anirudh Gangahar NFASL
+91 22 4037 4516
anirudh.gangahar@nomura.com
May 2016
COAL IN Buy
CMP: INR279 | TP: INR310
Key financials and valuation metrics
(INR mn)
Revenue
Reported EBITDA
Adjusted EBITDA
Reported net profit
Adjusted net profit
Adjusted EPS
EPS grow th (%)
BPS
Adjusted P/E (x)
Price/book (x)
EV/EBITDA (x)
ROE (%)
Dividend yield (%)
Net debt/equity
(Rs m n)
EBITDA
Reported
Adjusted
Net Profit
Reported
Adjusted
EPS (Rs)
Reported
Adjusted
FY15
741,201
173,354
211,621
137,267
177,155
22.0
(7.2)
64.0
12.7x
4.4x
8.3x
33.1
7.4
(1.3)
FY15
FY16F
774,977
185,477
209,087
140,415
163,667
22.2
0.8
53.2
12.6x
5.2x
6.7x
37.9
9.8
(1.3)
FY16F
FY17F
825,522
178,381
199,106
130,084
150,809
20.6
(7.1)
52.2
13.5x
5.3x
6.6x
39.1
6.5
(1.3)
FY18F
901,392
189,641
208,178
136,401
154,937
21.6
4.9
52.1
12.9x
5.3x
6.4x
41.4
6.5
(1.3)
FY17F
FY18F
173,354
211,621
185,477
209,087
178,381
199,106
189,641
208,178
137,267
177,156
140,415
163,666
130,084
150,809
136,401
154,937
21.7
28.0
22.2
25.9
20.6
23.9
21.6
24.5
370
320
270
220
Nov-10
Mar-11
Jul-11
Nov-11
Mar-12
Jul-12
Nov-12
Mar-13
Jul-13
Nov-13
Mar-14
Jul-14
Nov-14
Mar-15
Jul-15
Nov-15
Mar-16
Mean
-1SD
+1SD
Mean
-1SD
+1SD
17
11
15
10
9
13
11
7
6
9
5
4
Nov-15
Mar-16
Mar-15
Jul-15
Nov-14
Jul-14
Nov-13
Mar-14
Jul-13
Nov-12
Mar-13
Mar-12
Jul-12
Nov-11
Mar-11
Jul-11
Nov-10
Mar-16
Nov-15
Mar-15
Jul-15
Nov-14
Jul-14
Mar-14
Nov-13
Mar-13
Jul-13
Nov-12
Mar-12
Jul-12
Nov-11
Jul-11
Mar-11
Nov-10
Com pany
Ticker
COAL INDIA
Coal India - Adj.
COAL IN
Coal India - Rep.
COAL IN
India Pow er Utilities
NTPC
NTPC IN
PWGR
PWGR IN
NHPC
NHPC IN
Average
HK
Shenhua Energy-H 1088 HK
Yanzhou-H
1171 HK
Average
S.E.Asia
ITMG
ITMG IJ
Bukit Asam
PTBA IJ
Adaro
ADRO IJ
Average
Australia
Whitehaven Coal WHC AU
New Hope Corp
NHC AU
Average
M. Cap Price
P/E
EV/EBITDA
ROE (%)
Div yield (%)
Rating (US$m ) (Local) FY16F FY17F FY18F FY16F FY17F FY18F FY16F FY17F FY18F FY16F FY17F FY18F
Buy
Buy
26,578
26,578
278.7
278.7
10.8
12.5
11.7
13.5
11.4
12.9
6.3
7.1
6.6
7.4
6.4
7.0
24.5
37.9
23.1
39.1
23.1
41.4
9.8
9.8
6.5
6.5
6.5
6.5
Buy
Buy
NR
17,594
11,692
3,929
141.3
148.0
23.5
13.1
12.5
10.1
11.9
12.1
10.2
9.6
10.6
10.5
8.7
8.5
9.3
11.1
9.2
8.1
9.5
9.9
7.6
7.8
8.5
8.2
6.6
7.0
7.3
10.7
15.3
8.2
11.4
10.9
16.5
8.1
11.8
11.8
17.1
8.9
12.6
2.8
1.7
4.6
3.0
3.4
3.0
4.3
3.6
3.9
3.7
4.8
4.1
NR
NR
43,729
6,021
13.4
4.5
12.6
NM
12.6
12.3
NM
12.3
11.4
NM
11.4
5.1
13.7
9.4
6.2
18.7
12.4
5.9
13.9
9.9
5.5
1.3
3.4
6.1
(1.6)
2.2
6.3
(1.0)
2.6
2.9
0.3
1.6
3.0
0.1
1.6
3.3
0.4
1.9
NR
NR
NR
636
1,332
1,752
7,400
7,600
720
9.4
8.1
11.5
9.6
10.2
10.8
13.7
11.6
13.7
10.2
13.7
12.5
1.2
5.9
4.6
3.9
2.7
8.0
6.1
5.6
3.4
7.2
6.1
5.5
7.3
23.2
5.4
12.0
7.9
16.0
4.1
9.3
6.6
15.9
3.7
8.7
n/a
3.8
n/a
3.8
8.9
4.6
1.8
5.1
7.6
4.4
1.8
4.6
NR
NR
1,011
1,542
0.8
1.5
NM
NM
NM
NM
41.4
41.4
55.0
28.4
41.7
na
na
na
8.4
2.3
5.3
7.5
1.4
4.5
(8.2)
0.2
(4.0)
0.4
1.5
1.0
0.9
3.1
2.0
4.5
2.2
3.4
1.7
3.9
2.0
Note: [1] Pricing as of April 20, 2016; Jan 5, 2016 for US-listed companies; [2] CIL numbers are adjusted for provisioning of OB removal, [3]R1=Resources and
R2=Reserves, [4] NR = Not Rated; [5] US coal companies have Dec-ending fiscal year, hence for these companies, CY15=FY16
Source: Bloomberg for data on not rated stocks; companies; Nomura estimates
FY17F
Mar-17
211,062
-4.8%
(65,623)
145,438
-4.8%
19,105
(60,500)
104,043
1.00
104,043
1,089,152
459,039
1,089,152
408,712
1,497,863
FY18F
Mar-18
221,717
5.0%
(68,106)
153,611
5.6%
947
(66,500)
88,058
0.89
78,623
per-share
73
172
65
310
FY19F
Mar-19
250,076
12.8%
(74,716)
175,359
14.2%
(439)
(64,000)
110,920
0.80
88,425
FY20F
Mar-20
279,983
12.0%
(81,417)
198,566
13.2%
(4,199)
(64,000)
130,367
0.71
92,764
FY21F
Mar-21
313,018
11.8%
(90,892)
222,126
11.9%
(2,617)
(60,000)
159,509
0.64
101,339
FY22F
Mar-22
338,655
8.2%
(98,018)
240,637
8.3%
49,766
(60,000)
230,402
0.57
130,696
FY26F
Mar-26
356,636
-2.4%
(99,294)
257,342
-1.8%
(2,090)
(60,000)
195,252
0.36
70,366
FY35F
Mar-35
140,312
-13.4%
(20,225)
120,087
-10.2%
16,386
(60,000)
76,472
0.13
9,935
7.5%
5.0%
0.90
12.0%
Note: [1] For calculating the value of resources, we assign a value of 0.3 times probable reserves (considering 80% conversion ratio); [2] We assume WACC of
12.0% for CIL | Source: Company data, Nomura estimates
24.5
25.5
24.1
2.9%
0.6%
310
324
303
3.4%
0.7%
23.9
24.6
23.2
2.9%
24.5
25.3
23.8
3.1%
310
322
298
3.9%
Unit
KEY PHYSICAL METRICS
Production
mt
Offtake
mt
Inventory
mt
KEY OPERATING METRICS
Blended Realization
INR/ton
Cash cost
INR/ton
Cost of production
Reported
INR/ton
Adjusted
INR/ton
EBITDA
Reported
INR/ton
Adjusted
INR/ton
Net Profit
Reported
INR/ton
Adjusted
INR/ton
KEY OPERATING METRICS (USD)
Realization
USD/ton
Cash cost
USD/ton
Cost of production
Reported
USD/ton
Adjusted
USD/ton
EBITDA
Reported
USD/ton
Adjusted
USD/ton
Net Profit
Reported
USD/ton
Adjusted
USD/ton
Key m etrics
FY16F
FY17F
FY18F
YoY grow th
FY15
FY16F
FY17F
494.2
489.4
54.2
536.5
532.3
58.4
560.7
564.1
55.0
602.7
609.2
48.4
6.9%
3.8%
9.9%
8.6%
8.8%
7.8%
4.5%
6.0%
-6.0%
7.5%
8.0%
-11.9%
6.8%
7.6%
-3.7%
1,470
1,051
1,413
1,031
1,421
1,096
1,437
1,128
0.7%
0.4%
-3.9%
-1.9%
0.6%
6.3%
1.1%
2.9%
-0.7%
2.4%
1,149
1,072
1,099
1,055
1,154
1,117
1,181
1,150
0.5%
0.0%
-4.4%
-1.6%
5.1%
5.9%
2.3%
2.9%
0.9%
2.4%
354
432
349
393
316
353
312
342
4.4%
-3.0%
-1.4%
-9.0%
-9.3%
-10.2%
-1.6%
-3.2%
-4.2%
-7.5%
280
358
264
308
231
268
224
255
-12.5%
-8.6%
-5.9%
-14.0%
-12.6%
-13.1%
-2.9%
-4.8%
-7.2%
-10.7%
23.5
16.8
21.3
15.6
21.4
16.5
21.6
17.0
-3.5%
-3.8%
-9.3%
-7.5%
0.2%
5.9%
1.1%
2.9%
-2.8%
0.3%
18.4
17.1
16.6
15.9
17.4
16.8
17.8
17.3
-3.7%
-4.2%
-9.8%
-7.1%
4.7%
5.5%
2.3%
2.9%
-1.1%
0.3%
5.7
6.9
5.3
5.9
4.8
5.3
4.7
5.1
0.1%
-7.0%
-7.0%
-14.1%
-9.6%
-10.5%
-1.6%
-3.2%
-6.1%
-9.4%
4.5
5.7
4.0
4.6
3.5
4.0
3.4
3.8
-16.1%
-12.4%
-11.3%
-18.9%
-12.9%
-13.4%
-2.9%
-4.8%
-9.1%
-12.6%
FY15
CAGR
FY18F FY15-18F
Note: [1] Cash cost of production = Total opex less provision/write-offs and OB removal adjustment, [2] Cost metrics calculated on production whereas
realization/EBITDA/PAT is calculated on offtake, [3] INR/USD taken as 66.5 from FY17F onwards
Source: Company data, Nomura estimates
mt
BCCL
CCL
ECL
MCL
NCL
SECL
WCL
Total
FY16*
36
61
40
138
80
136
45
536
FY16E
36
61
42
150
78
137
45
549
FY17E
37
67
47
167
82
150
48
597
FY18E
41
80
52
187
90
161
50
661
FY19E
46
102
57
222
99
193
55
774
FY20E
53
134
62
250
110
240
60
908
mt
11%
10%
30
9%
25
8%
20
7%
15
6%
5%
10
4%
Note: [1] Figures for North Eastern Coalfields (NEC) are not included, [2]
*Adjusted for Actuals, [3] As per Ministry of Coal year-end review (Dec2015), WCL has revised its target from 60mt to 100mt by 2020 (year-wise
targets not available)
3%
2%
Feb'16
Dec'15
Oct'15
Aug'15
Jun'15
Apr'15
Feb'15
Dec'14
Oct'14
Aug'14
35
Jun'14
Apr'14
20%
CIL Target
Nomura Estimate
CIL Target (YoY)
Nomura Estimate (YoY)
mt
900
18%
16%
800
14%
12%
700
10%
600
8%
6%
500
4%
400
2%
FY16*
FY17F
FY18F
FY19F
FY20F
May
Jun
Jul
Aug
FY16
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Actual
FY16
YoY Target
3.1
3.0
3.9
6.3
4.0
10.4
10.3
0.0
41.0
2.7
2.9
4.0
6.1
2.9
10.3
10.0
0.0
38.8
2.0
2.6
3.6
5.5
3.0
9.1
9.0
0.0
34.8
1.8
2.7
4.3
5.7
2.5
9.1
10.1
0.0
36.2
2.1
2.7
4.3
5.7
2.6
10.0
9.8
0.0
37.2
2.9
2.8
4.9
6.9
3.6
12.0
11.4
0.0
44.4
3.9
2.9
5.9
6.8
3.9
12.1
12.1
0.0
47.5
4.3
3.1
5.9
7.6
4.5
12.9
13.9
0.0
52.1
4.6
3.2
5.7
8.0
4.5
13.1
13.7
0.1
52.9
4.5
3.3
6.2
7.3
4.8
12.1
12.8
0.1
51.0
5.1
3.9
8.0
8.4
5.3
14.3
14.1
0.2
59.2
40.2
35.9
61.4
80.2
44.8
135.7
137.9
0.5
536.5
0.5%
3.9%
10.3%
10.7%
8.9%
5.7%
13.6%
-37.8%
8.6%
42.1
35.9
60.6
78.1
45.1
137.0
150.0
1.2
550.0
-4.6%
0.0%
1.2%
2.7%
-0.6%
-1.0%
-8.1%
-59.8%
-2.5%
3.7
3.1
5.0
6.3
3.6
10.9
11.1
0.0
43.7
3.2
2.9
4.8
6.2
3.5
11.0
10.7
0.0
42.2
2.6
2.8
4.7
5.7
3.8
10.7
10.6
0.0
40.9
2.1
2.9
4.9
5.8
3.1
10.1
11.6
0.0
40.6
2.3
2.9
4.7
6.1
2.9
11.0
10.6
0.0
40.4
2.8
2.9
4.8
6.8
3.5
11.9
11.7
0.0
44.4
3.2
2.9
5.2
6.7
3.6
11.9
11.9
0.0
45.3
3.6
3.0
5.2
7.3
3.9
12.4
12.8
0.0
48.2
3.9
3.1
4.9
7.4
3.7
12.1
13.2
0.1
48.3
3.7
3.1
5.0
6.6
3.4
11.3
12.5
0.0
45.5
4.1
3.3
5.4
7.3
3.7
12.3
13.0
0.0
49.1
38.6
36.1
59.6
78.5
42.3
136.6
140.2
0.3
532.3
0.3%
7.4%
7.7%
6.5%
2.6%
10.9%
14.0%
-53.4%
8.8%
42.1
35.9
60.6
78.1
45.1
137.0
150.0
1.2
550.0
-8.5%
0.8%
-1.7%
0.5%
-6.2%
-0.3%
-6.5%
-72.1%
-3.2%
Var
Note: Minor discrepancy between the total FY production / offtake vs. sum of individual months is potentially due to a restatement of provisional historical
numbers by CIL | Source: Company data, Nomura research
Jan
185.0
210.0
13.5%
210.0
0.0%
204.5
-2.6%
Feb
193.0
209.0
8.3%
208.3
-0.3%
211.9
1.7%
Mar
195.0
220.0
12.8%
205.9
-6.4%
217.3
5.5%
Apr
182.0
201.0
10.4%
197.7
-1.6%
215.0
8.8%
May
180.0
184.0
2.2%
186.6
1.4%
207.0
10.9%
Jun
176.0
187.0
6.3%
178.9
-4.3%
198.2
10.8%
Jul
175.0
189.0
8.0%
175.5
-7.1%
197.0
12.3%
Aug
155.8
176.8
13.5%
179.6
1.6%
194.0
8.0%
Sep
154.0
182.0
18.2%
180.1
-1.0%
198.0
9.9%
Oct
183.0
169.0
-7.7%
192.0
13.6%
211.0
9.9%
Nov
186.0
190.0
2.2%
207.4
9.2%
224.0
8.0%
Dec
199.0
200.0
0.5%
207.0
3.5%
224.0
8.2%
(INR/ton)
E-auction coal
Beneficiated coal
FSA coal
Blended ASP
FY15
2,450
2,348
1,327
1,470
FY16F
1,903
2,302
1,320
1,413
FY17F
1,744
2,298
1,356
1,421
FY18F
1,717
2,876
1,353
1,437
yoy (%)
E-auction coal
Beneficiated coal
FSA coal
Blended ASP
12.3
(0.1)
1.1
0.7
(22.3)
(2.0)
(0.5)
(3.9)
(8.3)
(0.1)
2.7
0.6
(1.5)
25.1
(0.2)
1.1
(Rs m n)
E-auction coal
Beneficiated coal
By products
FSA coal
Total revenues
FY15
FY16F
FY17F
FY18F
114,920 116,167 109,323 110,244
28,100
31,647
31,481
55,261
11,670
13,134
11,964
12,605
565,456 590,564 648,193 696,758
720,146 751,512 800,961 874,868
% breakdow n of revenues
E-auction coal
16.0
Beneficiated coal
3.9
FSA coal
78.5
By products
1.6
Total
100.0
15.5
4.2
78.6
1.7
100.0
13.6
3.9
80.9
1.5
100.0
12.6
6.3
79.6
1.4
100.0
$/ton
(m t)
E-auction
Linkage - Pow er
Linkage - Non-Pow er
Steel
Cement
Fertilizer
Others
Total
FY11
47.7
304.2
72.5
9.3
10.0
2.7
50.6
424.5
FY12
50.9
312.1
70.0
4.1
6.7
2.8
56.4
433.0
FY13
49.1
345.4
71.6
4.7
6.5
2.5
57.9
466.2
FY14
58.0
353.8
59.6
3.7
5.5
2.3
48.2
471.5
FY15
46.9
384.2
58.3
3.8
5.6
2.3
46.7
489.4
60
50
55%
50%
45%
40%
40
35%
30
30%
20
25%
10
20%
FY13
FY14
FY15
FY16F
FY17F
FY18F
GCV
>7000
II
III
Change in Price
Priority
Other
Priority
Other
Priority
Other
6,700-7,000
4,870
4,870
4,870
4,870
0.0%
0.0%
6,400-6,700
4,420
4,420
3,890
3,890
-12.0%
-12.0%
IV
6,100-6,400
3,970
3,970
3,490
3,490
-12.1%
-12.1%
5,800-6,100
2,800
2,800
2,800
2,800
0.0%
0.0%
VI
5,500-5,800
1,450
1,960
1,600
2,150
10.3%
9.7%
VII
5,200-5,500
1,270
1,720
1,400
1,890
10.2%
9.9%
VIII
4,900-5,200
1,140
1,540
1,250
1,690
9.6%
9.7%
IX
4,600-4,900
880
1,180
970
1,310
10.2%
11.0%
4,300-4,600
780
1,050
860
1,160
10.3%
10.5%
XI
4,000-4,300
640
870
700
950
9.4%
9.2%
XII
3,700-4,000
600
810
660
890
10.0%
9.9%
XIII
3,400-3,700
550
740
610
820
10.9%
10.8%
XIV
3,100-3,400
500
680
550
740
10.0%
8.8%
XV
2,800-3,100
460
620
510
680
10.9%
9.7%
XVI
2,500-2,800
410
550
450
610
9.8%
10.9%
Notes: (1) Priority Sectors = power utilities (incl. IPPs), fertilizers and defence; (2) For WCL, there shall be a 10% add on over
and above the price mentioned above for GCV bands not exceeding 5800 Kcal/Kg; (*) For GCV exceeding 7000 Kcal/Kg, the
price shall increase by INR150/ton over and above the price applicable for GCV band exceeding 6700Kcal/kg but less than
7000 Kcal/kg, for every 100 Kcal/Kg increase in GCV. (3) An additional Rs300/ton shall be charged over and above the notified
price in respect of coal produced from Rajmahal mine of Eastern Coalfields Ltd
Source: Company data, Nomura research
CIL Discount of CIL's grade-wise coal price to comparable imported coal price (from Indonesia)
Grade
I
II
III
IV
V
VI
VII
VIII
IX
X
XI
XII
XIII
XIV
XV
XVI
GCV
Offtake
Range non-coking
(FY15)
Kcal/kg
(m t)
>7000
0.2
6,700-7,000
0.6
6,400-6,700
4.7
6,100-6,400
18.1
5,800-6,100
15.7
5,500-5,800
12.5
5,200-5,500
17.2
4,900-5,200
32.4
4,600-4,900
54.9
4,300-4,600
39.9
4,000-4,300
109.0
3,700-4,000
76.7
3,400-3,700
57.2
3,100-3,400
2,800-3,100
2,500-2,800
-
Noncoking
coal
m ix
%
0.1%
0.1%
1.1%
4.1%
3.6%
2.8%
3.9%
7.4%
12.5%
9.1%
24.8%
17.5%
13.0%
0.0%
0.0%
0.0%
CIL - Gross
FoB Price INA coal Discount of CIL to
Realization ($/m t)
(INA coal price
INA coal price
-- [A]
HBA / Platts) (CIF)- [B]
(1-A/B)
Others Pow er Others
$/m t
$/m t
Pow er Others
4,870
3,890
3,490
2,800
2,150
1,890
1,690
1,310
1,160
950
890
820
740
680
610
81.2
73.6
60.4
37.5
33.6
30.8
25.4
23.3
20.3
19.5
18.5
17.4
16.6
15.5
81.2
73.6
60.4
48.0
43.0
39.2
31.9
29.1
25.0
23.9
22.6
21.0
19.9
18.5
52.6
52.3
44.5
43.1
43.3
37.4
34.2
33.5
26.3
20.6
17.3
14.4
13.7
70.4
70.0
62.1
60.6
60.8
54.8
51.5
50.7
43.4
37.5
34.2
31.2
30.5
-15.4%
-5.1%
2.7%
38.2%
44.6%
43.8%
50.6%
54.0%
53.3%
48.1%
45.8%
44.2%
45.4%
-15.4%
-5.1%
2.7%
20.8%
29.2%
28.5%
38.0%
42.7%
42.3%
36.3%
34.0%
32.6%
34.7%
44.6%
33.5%
Note For our calculations, we assume [1] INR/USD = 66.5; [2] Royalty = 14%; Central Excise Duty + Education cess = 6.2%; [4] Clean environment cess =
INR400/ton; [5] Surface transport & loading charge of INR42/ton; [6] Port handling charge of INR350/ton; [7] Customs duty of 2.58%; [8] State-specific taxes
of ~5%. | Source: Nomura estimates
10
FY15
489.4
46.9
FY16F
532.3
61.1
FY17F
564.1
62.7
FY18F
609.2
64.2
9.6
2.4
87.2
0.7
11.6
2.6
84.8
0.9
11.2
2.4
85.5
0.8
10.7
2.3
86.2
0.7
751,512
116,167
1,903
800,961
109,323
1,744
874,868
110,244
1,717
15.5
4.2
78.6
1.7
13.6
3.9
80.9
1.5
12.6
6.3
79.6
1.4
120%
100%
80%
60%
40%
20%
0%
FY12
FY13
FY14
(m n tons)
Rail
MGR
Road
Others
Total
20
18
16
FY13
FY14
FY15
FY16
14
12
10
% of total despatch
Rail
MGR
Road
Others
8
6
4
2
FY12
229.1
79.3
113.4
11.2
433.0
FY13
251.1
88.8
115.7
10.7
466.2
FY14
259.4
88.8
112.8
10.5
471.5
FY15
266.5
90.1
122.1
11.3
490.0
52.9
18.3
26.2
2.6
53.9
19.0
24.8
2.3
55.0
18.8
23.9
2.2
54.4
18.4
24.9
2.3
0
MCL
CCL
SECL
BCCL
ECL
NCL
WCL
11
(INR m n)
Operating Expenses
430,537
470,174
495,603
529,580
565,890
626,416
693,214
Employee cost
263,874
273,208
279,144
298,741
295,044
332,084
363,705
3,176
6,224
4,094
2,981
9,239
5,717
5,437
Change in Invesntory
(3,810)
4,939
927
(5,305)
(5,909)
3,033
5,640
55,041
60,621
70,221
72,564
70,894
71,861
74,934
20,125
23,335
22,822
23,473
24,716
25,312
26,938
Contractual Expenses
49,010
58,020
68,275
85,126
112,597
129,100
150,454
43,122
43,827
50,121
51,999
59,309
59,309
66,106
Social Overheads
FY13
FY14
FY15
FY16F
FY17F
FY18F
17.9%
9.2%
5.4%
6.9%
6.9%
10.7%
10.7%
Employee cost
44.9%
3.5%
2.2%
7.0%
-1.2%
12.6%
9.5%
Social Overheads
-86.0%
96.0%
-34.2%
-27.2%
209.9%
-38.1%
-4.9%
Change in Invesntory
-69.6%
NM
-81.2%
NM
11.4%
-151.3%
85.9%
5.2%
10.1%
15.8%
3.3%
-2.3%
1.4%
4.3%
14.7%
15.9%
-2.2%
2.9%
5.3%
2.4%
6.4%
7.0%
18.4%
17.7%
24.7%
32.3%
14.7%
16.5%
-24.7%
1.6%
14.4%
3.7%
14.1%
0.0%
11.5%
988
1,040
1,072
1,072
1,055
1,117
1,150
Employee cost
605
604
604
604
550
592
603
Social Overheads
Consumption of Stores & Spares
Pow er & Fuel
Contractual Expenses
Others (Ex OB Removal Adj.)
Y-Y grow th (%) in Opex/ton
Employee cost
Social Overheads
Consumption of Stores & Spares
Pow er & Fuel
Contractual Expenses
Others (Ex OB Removal Adj.)
14
17
10
126
134
152
147
132
128
124
46
52
49
47
46
45
45
112
128
148
172
210
230
250
99
97
108
105
111
106
110
16.7%
5.3%
3.1%
0.0%
-1.6%
5.9%
2.9%
43%
0%
0%
0%
-9%
8%
2%
-86%
89%
-36%
-32%
186%
-41%
-12%
4%
6%
13%
-3%
-10%
-3%
-3%
14%
12%
-4%
-4%
-3%
-2%
-1%
6%
14%
15%
17%
22%
10%
8%
-25%
-2%
12%
-3%
5%
-4%
4%
Note: OBR = Overburden Removal Adjustment | Others = Repairs + Miscellaneous expenses + Provisions/write-backs
Source: Company data, Nomura estimates
390
1.2
370
1.0
350
0.8
330
0.6
310
0.4
290
0.2
270
250
FY12
FY13
FY14
FY15
70
INR bn
350
65
60
300
55
250
50
200
45
150
40
100
35
50
30
FY12
FY13
FY14
FY15
FY16F
FY17F
FY18F
12
40%
35%
58%
54%
INR bn
30%
32%
70
30%
50%
46%
25%
34%
28%
60
26%
42%
20%
38%
15%
24%
50
34%
10%
22%
30%
FY12
FY13
FY14
FY15
FY16F
FY17F
40
FY18F
INR bn
FY13
FY14
FY15
FY16F
FY17F
FY18F
20%
FY12
Operating CF (LHS)
Capex (LHS)
Capex per ton of production (RHS)
INR/ton
250
120
110
200
14%
INR bn
200
12%
100
10%
90
150
150
8%
80
100
70
100
6%
60
50
50
4%
50
40
FY12
FY13
FY14
FY15
FY16F
FY17F
FY18F
2%
FY12
Source: Company data, Nomura estimates
FY13
FY14
FY15
FY16F
FY17F
FY18F
13
Qtrly - Snapshot
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
QoQ
YoY
9MFY15
9MFY16
YoY
(INR m n)
Production (mn tons)
Jun-14
108.3
Sep-14
102.4
Dec-14
131.6
Mar-15
151.9
Jun-15
121.4
Sep-15
108.2
Dec-15
(%)
144.0 33.0%
(%)
9.4%
Dec-14
342.4
Dec-15
373.5
(%)
9.1%
119.6
110.5
124.6
134.7
129.4
122.0
137.9
13.0% 10.7%
354.7
389.3
9.8%
Realization (Rs/t)
1,488
1,419
1,426
1,490
1,465
1,390
1,376
-1.0%
-3.5%
1,488
1,454
-2.3%
457
281
405
554
437
250
403
61.4%
-0.4%
384
366
-4.6%
8.1%
321
328
2.3%
7.0%
527,805
566,074
400
231
323
437
382
247
350
41.7%
161,645
183,105
213,396
195,181
174,899
195,994
12.1%
Employee cost
(70,466)
(72,866)
(74,914)
(80,341)
(71,852)
(75,304)
(73,541)
-2.3%
Materials consumed
(15,707)
(16,928)
(18,420)
(21,510)
(15,867)
(16,443)
(17,805)
8.3%
-3.3%
(51,055)
(50,115)
(5,435)
(5,854)
(6,089)
(6,095)
(5,882)
(6,537)
(6,183)
-5.4%
1.5%
(17,378)
(18,602)
7.0%
Contractual Expenses
(17,989)
(16,264)
(22,825)
(28,048)
(24,903)
(22,542)
(29,615)
31.4% 29.7%
(57,078)
(77,061)
35.0%
Others
(18,789)
(18,636)
(10,401)
(2,740)
(20,143)
(23,579)
19.1%
54,671
31,096
50,454
74,661
56,534
30,494
55,617
29.9%
19.2%
27.6%
35.0%
29.0%
17.4%
28.4%
OBR
(6,801)
(5,536)
(10,179)
(15,752)
(7,091)
(410)
(7,419)
EBITDA (reported)
47,870
25,560
40,276
58,909
49,442
30,084
48,198
Depreciation
(5,183)
(5,363)
(5,672)
(5,999)
(5,575)
(5,864)
(6,279)
EBIT
42,687
20,197
34,604
52,910
43,867
24,220
41,920
EBITDA (pre-OB)
Margin
Interest expenses
(11)
(11)
(22)
(29)
(40)
(15)
(30)
82.4% 10.2%
NM -27.1%
(47,826)
(56,955)
136,221
142,644
25.8%
25.2%
7.3%
1.1%
-1.8%
4.7%
(22,515)
(14,920) -33.7%
60.2% 19.7%
113,706
127,725
7.1% 10.7%
(16,218)
(17,718)
9.2%
73.1% 21.1%
97,488
110,007
12.8%
95.4% 33.8%
(44)
(85)
12.3%
NM
Other Income
16,745
15,357
16,344
17,261
14,471
14,314
13,539
-5.4% -17.2%
48,445
42,324
PBT
59,420
35,543
50,925
70,142
58,298
38,518
55,429
43.9%
8.8%
145,889
152,245
4.4%
(19,246)
(13,668)
(18,131)
(27,624)
(20,429)
(13,328)
(18,584)
39.4%
2.5%
(51,044)
(52,341)
2.5%
Taxes
Minority Interest
Norm alized PAT
Extraordinary
Reported PAT
40,175
21,876
158
48
40,333
21,924
32,795
(170)
32,625
42,518
37,869
25,191
36,845
248
337
25,438
37,183
(133)
42,386
(226)
37,644
46.3% 12.4%
46.2% 14.0%
-12.6%
94,846
99,905
36
359
NM
94,882
100,264
5.7%
5.3%
14
Key Revenue
Metrics
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
QoQ
YoY
9MFY15
9MFY16
YoY
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
(%)
(%)
Dec-14
Dec-15
(%)
Sales volum e (m t)
E-auction
16.8
10.6
5.6
13.9
16.0
14.7
15.2
33.0
45.9
39.1%
3.0
2.8
3.0
3.2
3.4
3.1
3.7
16.6%
22.0%
8.7
10.2
17.0%
99.2
96.1
114.7
116.0
109.0
103.0
116.4
13.0%
1.5%
310.0
328.4
5.9%
14.0%
9.6%
4.5%
10.4%
12.4%
12.1%
11.1%
9.3%
2.5%
2.5%
2.4%
2.4%
2.6%
2.6%
2.7%
2.5%
2.6%
82.9%
87.2%
92.4%
86.5%
84.2%
84.7%
84.9%
87.5%
84.6%
Realization (INR/ton)
E-auction
2,246
2,496
3,134
2,386
2,184
1,788
1,866
4.4% -40.5%
2,477
1,952
-21.2%
Beneficiated coal
2,393
2,446
2,618
1,971
2,229
2,328
2,369
1.8%
-9.5%
2,487
2,310
-7.1%
Notified (FSA)
Blended (on offtake)
1,320
1,260
1,298
1,358
1,318
1,294
1,277
-1.3%
-1.6%
1,293
1,296
0.2%
1,488
1,419
1,426
1,490
1,465
1,390
1,376
-1.0%
-3.5%
1,488
1,454
-2.3%
Revenues (INR m n)
E-auction
37,680
26,530
17,520
33,190
34,940
26,350
28,290
7.4%
61.5%
81,730
89,580
9.6%
Beneficiated coal
7,060
6,800
7,854
6,386
7,600
7,310
8,670
18.6%
10.4%
21,714
23,580
8.6%
130,885
121,100
148,921
157,539
143,630
133,340
148,700
11.5%
-0.1% 400,907
425,670
6.2%
Beneficiated coal
Notified (FSA)
Sales Mix (%)
E-auction
Beneficiated coal
Notified (FSA)
Notified (FSA)
Revenue Mix (%)
E-auction
11.8%
21.2%
16.9%
9.9%
16.5%
18.4%
15.5%
14.9%
16.0%
4.0%
4.3%
4.4%
3.2%
4.0%
4.3%
4.6%
4.2%
4.3%
73.5%
77.2%
83.8%
78.5%
75.8%
78.6%
78.4%
78.2%
77.6%
Beneficiated coal
Notified (FSA)
2.8% 171.2%
16.3%
0.5
0.5
0.6
0.5
0.4
0.5
0.6
21.4%
4.1%
1.6
1.5
-7.5%
2.4
2.3
2.4
2.7
3.0
2.6
3.1
-12.0%
14.8%
7.1
8.7
22.4%
17.6%
17.6%
19.7%
16.4%
12.3%
16.2%
15.0%
18.3%
14.5%
82.4%
82.4%
80.3%
83.6%
87.7%
83.8%
85.0%
81.7%
85.5%
5,981
6,245
5,559
3,019
4,619
4,745
5,127
5,906
4,851
-17.9%
1,626
1,633
1,898
1,766
1,893
1,859
1,881
1,720
1,879
9.2%
3,110
3,060
3,280
1,600
1,940
2,420
2,820
9,450
7,180
-24.0%
3,950
3,740
4,574
4,786
5,660
4,890
5,850
12,264
16,400
33.7%
2.7% -24.0%
-1.8%
13.8%
24.7% -20.9%
-13.6%
30.7%
15
Growth (%)
Revenue
EBITDA
Norm alis ed EPS
Norm alis ed FDEPS
FY14
706,075
-162,245
543,831
-107,044
-279,144
157,643
177,607
-19,964
157,643
-580
71,719
228,781
-79,074
149,708
0
149,708
1,409
151,117
-211,427
FY15
741,201
-175,859
565,342
-116,445
-298,741
150,156
173,354
-23,198
150,156
-73
65,706
215,789
-76,902
138,888
1
138,889
-1,622
137,267
-154,994
FY16F
774,977
-202,298
572,679
-116,573
-295,044
161,062
185,477
-24,415
161,062
-111
54,369
215,320
-75,263
140,057
0
140,056
359
140,415
-208,198
FY17F
825,522
-229,306
596,216
-112,275
-332,084
151,857
178,381
-26,524
151,857
-77
50,091
201,871
-71,787
130,084
0
130,084
0
130,084
-136,773
FY18F
901,392
-257,966
643,426
-119,445
-363,705
160,276
189,641
-29,366
160,276
-72
50,967
211,170
-74,769
136,401
0
136,401
0
136,401
-136,773
-60,311
-17,727
-67,783
-6,688
-372
FY14
11.6
11.8
11.8
10.4
10.0
4.2
7.0
7.9
77.0
25.2
22.3
21.4
34.6
139.9
33.3
33.0
FY15
12.8
12.7
12.7
7.4
9.0
4.4
7.1
8.2
76.3
23.4
20.3
18.5
35.6
112.9
33.2
28.5
FY16F
12.5
12.6
12.6
9.8
10.8
5.2
7.1
8.2
73.9
23.9
20.8
18.1
35.0
148.3
38.0
28.2
FY17F
13.5
13.5
13.5
6.5
8.9
5.3
7.4
8.7
72.2
21.6
18.4
15.8
35.6
105.1
39.1
25.0
FY18F
12.9
12.9
12.9
6.5
9.5
5.4
7.0
8.3
71.4
21.0
17.8
15.1
35.4
100.3
41.5
24.4
FY14
1.1
(9.5)
(13.4)
(13.4)
FY15
5.0
(2.4)
(7.2)
(7.2)
FY16F
4.6
7.0
0.8
0.8
FY17F
6.5
(3.8)
(7.1)
(7.1)
FY18F
9.2
6.3
4.9
4.9
Year-end 31 Mar
EBITDA
Change in working capital
Other operating cas hflow
Cashflow from operations
Capital expenditure
Free cas hflow
Reduction in inves tm ents
Inc in other LT liabilities
Adjus tm ents
CF after investing acts
Cas h dividends
Debt is s ue
Others
CF from financial acts
Net cas hflow
Beginning cas h
Ending cash
Ending net debt
FY14
177,607
2,050
-4,059
175,598
-41,482
134,116
-13,799
6,750
-4,609
122,458
-211,427
-11,272
1,776
-220,923
-98,465
622,360
523,895
-522,114
FY15
173,354
37,504
-15,555
195,302
-49,923
145,380
9,615
4,826
-982
158,838
-154,994
2,302
884
-151,808
7,030
523,895
530,925
-526,842
FY16F
185,477
-2,621
-19,570
163,287
-50,420
112,866
2,127
5,687
-1,763
118,918
-208,198
-1,818
686
-209,330
-90,412
530,925
440,513
-438,248
FY17F
178,381
39,829
-21,319
196,892
-60,500
136,392
0
5,250
-1,123
140,519
-136,773
-136
668
-136,240
4,279
440,513
444,792
-442,663
FY18F
189,641
19,483
-23,944
185,181
-66,500
118,681
0
5,804
-920
123,565
-136,773
-136
989
-135,919
-12,354
444,792
432,438
-430,444
FY14
523,895
82,410
55,681
124,850
786,836
37,749
198,121
1,022,706
16,943
563,729
580,672
1,781
15,572
598,026
636
63,164
360,881
424,045
1,022,706
FY15
530,925
85,219
61,838
154,856
832,838
28,134
224,846
1,085,818
20,833
636,315
657,148
4,083
20,398
681,629
658
63,164
340,367
403,531
1,085,818
FY16F
440,513
93,463
67,440
148,105
749,521
26,007
250,850
1,026,379
23,910
637,713
661,623
2,265
26,085
689,973
659
63,164
272,584
335,748
1,026,379
FY17F
444,792
94,576
64,310
159,507
763,185
26,007
284,827
1,074,019
28,179
682,657
710,837
2,129
31,335
744,301
659
63,164
265,896
329,059
1,074,019
FY18F
432,438
102,046
59,141
173,031
766,657
26,007
321,961
1,114,625
30,352
715,793
746,146
1,994
37,139
785,279
659
63,164
265,524
328,687
1,114,625
FY14
23.9
23.7
67.1
29.0
FY15
21.7
22.0
63.9
20.7
FY16F
22.2
22.2
53.2
27.4
FY17F
20.6
20.6
52.1
18.0
FY18F
21.6
21.6
52.0
18.0
FY14
48.4
125.8
35.3
FY15
41.3
122.0
39.2
FY16F
42.2
116.9
40.5
FY17F
41.6
104.9
41.5
FY18F
39.8
87.3
41.4
Per share
Reported EPS (INR)
Norm EPS (INR)
BVPS (INR)
DPS (INR)
Activity (days)
Days receivable
Days inventory
Days payable
Source: Company data, Nomura estimates | Note: Financials/Valuations are as of the date of the most recently published report (http://www.Nomura.com) rather than the date of this document.
16
Note: * Not operational; Opt = Operator; Eastern Dedicated Freight Corridor is from Ludhiana to Dankuni In West Bengal
Source: Coal India RHP, CPCB, Industry Sources
17
Coal India Status of three trunk rail-links (Jharkhand, Odisha, Chhattisgarh) for coal evacuation
Location
Length of rail link (km)
Evacuation Capacity (mtpa)
Project Cost (INR bn)
Tori-Shivpur-Kathautia
Jharsuguda-Barpali-Saradega
Ib Valley, Odisha
53
95
10.1
Mand-Raigarh, Chhattisgarh
168
150
65.6
Project Segments
Implementation Mode
Build-out Status
Commissioning Timeline
Jharsuguda-Saradega
Basundhara, Garjanbahal,
Siarmal, Kulda
Customer Deposit (Line #1)
JV (Line #2,3)
Jharsuguda-Barpali : Sep-2016
Barpali-Saradega : Mar-2017
18
Note: Imports at higher GCV shown to reflect the typically higher quality of imported coal | Source: MoC, CEA, Company data, Nomura estimates
110,000
100,000
90
80%
80
75%
15%
70
90,000
70%
10%
60
80,000
65%
5%
70,000
0%
50
60%
-5%
60,000
55%
40
-10%
50,000
50%
30
Mar-16
Nov-15
Mar-15
Jul-15
Nov-14
Mar-14
Jul-14
Nov-13
Mar-13
Jul-13
Nov-12
Mar-12
Jul-12
Nov-11
Mar-11
Jul-11
Nov-10
Jul-10
Mar-16
Nov-15
Mar-15
Jul-15
Nov-14
Mar-14
Jul-14
Nov-13
Mar-13
Jul-13
Nov-12
Mar-12
Jul-12
Nov-11
Mar-11
Jul-11
Nov-10
Jul-10
19
FY12
FY13
FY14
FY15
Dem and
656.3
696.0
772.8
739.4
787.0
Supply
524.1
535.3
568.8
572.5
608.2
CIL
424.3
432.7
463.8
471.5
489.4
SCCL
50.1
51.4
53.3
47.9
52.7
Others
49.6
51.3
51.7
53.1
66.0
132.2
160.7
204.1
166.9
178.8
68.9
102.8
145.8
166.6
212.1
-6%
49%
42%
14%
27%
Gap
Total Im ports
YoY (%)
FY11
68.9
35.9
15.9
11.2
1.8
0.8
3.2
415.5
FY12
102.8
55.3
27.8
12.2
3.0
1.0
3.6
788.4
FY13
145.8
82.4
30.5
20.3
6.4
1.0
5.2
868.5
FY14
FY15
166.9
212.1
101.9
118.2
34.5
47.5
20.6
30.7
3.65
4.27
1.13
NA
5.10
11.43
923.3 1,045.2
Production
600
100
Offtake
90
550
SCCL
Captive Blocks (incl. PSUs/UMPPs)
80
70
500
60
50
450
40
400
30
20
350
FY11
FY12
FY13
FY14
FY15
FY16
FY17F FY18F
FY11
FY12
FY13
FY14
FY15
Source: Company data, Ministry of Coal (Govt of India), PIB, Nomura estimates
20
Penal ty (%)
1.5
5.0
10.0
20.0
40.0
Incenti ve (%)
10.0
20.0
40.0
Overall
Domestic Coal
Imported Coal
FY13
FY14
FY15
FY16
FY17*
80%
65%
15%
80%
65%
15%
80%
65%
15%
80%
67%
13%
80%
75%
5%
Penal ty (%)
10.0
20.0
40.0
Incenti ve (%)
10.0
20.0
40.0
21
Clause
Delivery Point
Obligation to accept
imported coal
Quantity/Quality of
Imported coal
Weighment of Coal
Applicable Laws
Explanation
Pow er plant for w hich coal is consigned.
All law s including those law s effected by any Province/State/Country having jurisdiction over source of
imported coal.
Once agreed, purchaser cannot reject or not accept the coal consignment. In case of refusal, CIL has the right
to recover base price and all costs incurred on bringing the coal
1ton of imported coal = 1.5ton of domestic coal, for purpose of meeting quantity obligations
FY16
NIL
0-1.5
0-2
2-7
7-20
FY17
onwards
NIL
0-1.5
0-5
5-10
10-20
20-40
20-40
22
Coal Blocks Only 4 out of 46 producing/ready-to-produce coal blocks were not de-allocated by the SC
S No Com pany Nam e
Block Nam e
KPCL
Budge Budge
Mejia TPS-II
CPP
Ropar, Bhatinda, Lehra Mohabbat
Tamnar TPP
Sasan UMPP
Projects of WBPDCL - Bandel,
Santaldih, Sagardighi
Chhabra-II & Kalisindh TPP
Bakreshw ar & Kolaghat TPS
Bakreshw ar & Kolaghat TPS
Bellary TPS U-2
Goindw al Sahib
Barh-II, Kudgi, Lara
Mejia TPS-II
22
Capacity
PPA-tied
(MW) Capacity (MW)
P
G
P
G
P
P
G
G
G
3.1
1.8
2.2
6.9
5.3
0.2
3.0
Yes
Mar-09
Aug-13
G
G
500
Yes
Aug-08
540
3720
500
Capped
Yes
Yes
FY15F
FY15F
FY15F
P
G
G
750
500
750
2620
1000
3960
750
500
n/a
2620
150
3960
Yes
Yes
n/a
Yes
No
Yes
2030
2030
Yes
1700
1700
Yes
2310
2310
500
540
3720
500
CPP
CPP
CPP
CPP
CPP
CPP
Coking coal block
CPP
Coking coal block
CPP
CPP
CPP
CPP
13
NA
Gadarw ara TPS
JPVL Nigrie
Multiple (Particularly for SMEs)
0.5mtpa for linked Cement plant
4
CPP
CPP
NA
135
1320
NA
NA
Production (m t)
Geological
FY13
FY14 FY15F Reserves (m t)
NA
47
495
NA
NA
NA
Yes
Yes
NA
NA
Feb-99
Jun-04
Sep-06
Jul-06
Dec-07
Dec-08
Dec-08
Mar-09
Nov-09
Mar-11
Dec-11
May-13
Nov-12
P
P
P
P
P
P
P
P
G
P
P
P
P
Apr-07
Oct-04
Dec-13
Apr-12
FY15F
G
P
G
G
G
FY15F
FY15F
3.0
1.5
2.5
6.0
6.2
1.7
2.3
0.1
1.2
2.8
2.2
2.5
7.0
6.3
2.0
2.0
4.0
5.5
140.5
85.5
22.6
562.0
246.0
600.0
210.2
125.7
360.0
0.3
0.0
0.2
0.5
0.0
8.0
14.0
2.5
2.5
2.5
152.5
92.3
1,600.0
196.2
25.6
27.3
NA
NA
NA
37.3
6.0
0.8
0.5
1.0
0.2
0.6
0.1
1.0
0.1
0.1
6.0
0.9
0.4
1.0
0.1
0.8
0.5
1.2
0.1
0.1
6.0
1.0
1.0
1.0
0.2
0.8
0.6
1.2
0.1
0.1
0.3
0.3
0.4
124.0
126.0
125.0
34.5
15.3
29.8
231.2
156.0
285.0
34.3
19.0
0.1
10.7
0.3
11.6
0.3
12.7
243.0
27.0
9.3
101.2
103.2
36.0
0.7
Ops Suspended
0.3
0.3
0.0
1.5
0.7
1.0
0.0
1.0
2.8
37.0
0.0
0.1
52.9
195.0
30.4
6,340.5
0.3
0.1
0.3
0.4
P
P
39.9
Notes: [1] Blocks highlighted in grey were exempted from de-allocation; [2] Out of the 12 coal blocks allocated for UMPPs (all exempted from de-allocation), only
two are currently in production | Source: Ministry of Coal, Nomura research
23
Auction
Date
Pow er
1
14-Feb
1
15-Feb
1
16-Feb
1
17-Feb
1
18-Feb
1
19-Feb
2
4-Mar
2
5-Mar
2
7-Mar
2
8-Mar
2
9-Mar
Non Pow er
1
14-Feb
1
15-Feb
1
15-Feb
1
16-Feb
1
16-Feb
1
17-Feb
1
17-Feb
1
18-Feb
1
19-Feb
1
20-Feb
1
21-Feb
1
22-Feb
2
4-Mar
2
4-Mar
2
5-Mar
2
7-Mar
2
7-Mar
2
8-Mar
2
8-Mar
2
9-Mar
3
11-Aug
3
11-Aug
3
13-Aug
Coal Blocks
Winner
Talabira-I
Sarisatolli
Trans Damodar
Amelia North
Tokisud North
Gare Palma IV/2 & IV/3
Jitpur
Mandakini-A
Tara
Ganeshpur
Utkal-C
GMR Energy
CESC
Durgapur Projects
JPVL
Essar Pow er
JSPL
Adani Pow er
MEML
JSPL
GMR Energy
Monnet Pow er
Sial Ghogri
Belgaon
Kathautia
Mandla North
Marki Mangli-Ill
Ardhagram
Chotia
Gare Palma IV/5
Bicharpur
Gare Palma IV/4
Gare Palma IV/1
Gare Palma IV/7
Brinda & Sisai
Moitra
Meral
Dumri
Nerad Malegaon
Mandla-South
Gare-Palma IV/8
Lohari
Marki Mangli-I
Bhaskarpara
Majra
Reliance Cement
Sunflag Iron & Steel
Hindalco
JP Associates
BS Ispat
OCL Iron & Steel
Balco
Hindalco
Ultratech Cement
Hindalco
Balco
Monnet Ispat
Usha Martin
JSW Steel
Trimula Industries
Hindalco
Indrajit Pow er
Jaypee Cement
Ambuja Cements
Araanya Mines
Topsw orth Urja
Crest Steel & Pow er
Jaypee Cement
Bid Price
(Rs/ton)
Extractable
Res. (m t)
Mine plan
(m tpa)
Coal GCV
(kCal/kg)
(478)
(470)
(940)
(712)
(1,110)
(108)
(302)
(650)
(126)
(704)
(770)
28.8
83.0
48.4
70.3
52.0
187.2
65.5
287.9
166.9
91.8
123.9
3.0
3.5
1.0
2.8
2.3
6.3
2.5
7.5
6.0
4.0
3.4
3600-4200
3200-4800
3600-5800
3600-5400
3200-5800
3200-5400
3200-4800
3200-6400
3200-5400
3200-4800
3200-4200
610-700
550-970
610-1600
610-1400
550-1600
550-1400
610-1070
610-3490
610-1540
610-1070
610-770
1,402
1,785
2,860
2,502
918
2,302
3,025
3,502
3,003
3,001
1,585
2,619
1,804
1,512
727
2,127
660
1,852
2,291
2,438
715
755
1,230
5.7
14.2
26.0
84.0
4.2
19.3
24.0
42.4
29.1
27.4
126.5
56.6
25.4
29.9
12.7
46.1
10.3
13.4
11.8
9.0
10.0
24.1
14.9
0.3
0.3
0.8
1.5
0.2
0.4
1.0
1.0
0.8
1.0
6.0
1.2
0.7
1.0
0.4
1.0
0.4
0.3
1.2
0.2
0.3
1.0
0.5
3600-5800
4800-5800
5400-6400
4200-5400
3600-5400
3600-6400
3600-5800
4200-6400
3200-5800
4200-5400
3200-4200
3200-4800
3200-6700
3600-4800
4200-6700
3200-6400
3200-5400
4200-5800
3200-4800
4200-6700
4200-4800
3600-6400
4200-5800
820-2150
1310-2150
1890-3490
950-1890
820-1890
820-3490
820-2150
950-3490
740-2150
950-3490
740-950
740-1310
740-3890
820-1310
950-3890
740-3490
740-1890
950-2150
740-1310
950-3890
950-1070
610-3490
950-2150
Source: Ministry of Coal, Nomura research | Note JSPLs winning bids for Gare Palma IV/2 & IV/3 and Tara coal blocks + Balcos winning bid for Gare Palma
IV/1 coal blocks have not been accepted by the GoI (under litigation); Res. = Reserves
24
Coal Block
Schedule-II m ines
1
Khagra Joydev
2
Baranj I to IV, Kiloni, Manora Deep
3
Pachhw ara Central
4
Parsa East, Kanta Basan
5
Barjora North
6
Barjora
7
Gangaramchak, Gangaramchak - Bhadulia
8
Tara (East) & (West)
9
Pachhw ara North
Schedule-III m ines
1
Badam
2
Gare Palma Sector III
3
Gidhmuri, Paturia
4
Gare Palma Sector I
5
Banhardih
6
Gare Palma Sector II
7
Kerandari
8
Talaipalli
9
Chatti Bariatu, Chatti Bariatu South
10
Dulanga
11
Manoharpur, Dipside Manoharpur
12
Parsa
13
Rajbar E & D
14
Tadicherla - I
15
Naini
16
Sitanala
17
Saharpur Jamarpani
18
Kasta (East)
Geological
Reserves (m t)
New Allottee
Prior Allottee
DVC
KPCL
PSPCL
RRVUNL
WBPDCL
WBPDCL
WBPDCL
WBPDCL
WBPDCL
DVC
KPCL
PSEB
RRVUNL
DVC
WBPDCL
WBPDCL
WBSEB
WBPDCL
196.2
152.5
562.0
360.0
85.5
8.0
14.0
210.2
125.7
Bihar Genco
CSPGCL
CSPGCL
GSECL
JUUNL
Mahagenco
NTPC
NTPC
NTPC
NTPC
OCPL
RRVUNL
Tenughat Vidyut
TGenco
SCCL
SAIL
UPRUVNL
WBPDCL
Tenughat Vidyut
GIDC
Chhattisgarh SEB
CMDC
JSEB
MSMC & TNSEB
NTPC
NTPC
NTPC
NTPC
OPCL
Chhattisgarh SEB
Tenughat Vidyut
APGenco
GMDC & PIPDICL
SAIL
DVC
DVC
144.6
210.2
80.3
900.0
400.0
768.0
229.0
965.0
597.0
260.0
531.7
150.0
385.0
61.3
500.0
108.8
600.0
105.0
25
Coal India 24.6GW of PSU capacity has granted coal supply under Block Linkage
Plant Name
Kudgi - I
Barh-II
Tanda-II
Barethi
Lara
Darlipalli
Bilhaur
Capacity (MW)
3x800
2,400
2x660
1,320
2x660
1,320
4x660
2,640
2x800
1,600
2x800
1,600
2x660
1,320
12,200
UPRVUNL
Obra C
Panki
Jawaharpur
Harduaganj
2x660
1x660
2x660
1x660
1,320
660
1,320
660
Saharpur-Jamarpani
Saharpur-Jamarpani
Saharpur-Jamarpani
Saharpur-Jamarpani
OPGCL
IB Thermal
2x660
KPCL
Bellary Unit 3
Yermarus
CSPGCL
TSPGCL
NTPC
Total (NTPC)
Scheduled Start
Jun-21
Nov-19
Nov-19
May-20
Nov-19
Nov-19
Aug-22
Jun-20
Jun-20
Jun-20
Jun-20
Sep-20
Sep-20
Apr-20
Sep-19
Mar-19
Mar-18
1x700
2x800
Jan-21
Jan-21
Mar-16
Mar-16
May-16
Marwa
2x500
May-19
Mar-16
May-16
Kakatiya
1x600
600 Tadicherla - I
2018-19
Mahagenco
Koradi
3x660
Chandrapur (U8,9) 2x500
Parli (U8)
1x250
Total (State Gencos)
Source:
Grant
TotalMinistry of Coal, Nomura research
Apr-19
Apr-19
Apr-19
Oct-15 Synchronized
Dec-15
Mar-16
Mar-16
Mar-16
Apr-16
Jun-16
26
Capacity
(MW)
67,370
5,395
6,205
16,671
9,835
38,106
10,845
11,127
21,972
60,078
Feb-2012 List
FSA Qty Com m itted Qty
(m t) @65% FSA (m t)
304.8
198.1
24.4
15.8
24.9
16.2
71.6
46.5
39.7
25.8
160.6
104.4
44.2
28.7
49.0
31.8
93.2
60.6
253.8
165.0
Note: MoC document mentions overall capacity of the plant where we capture the % of linked capacity, thereby the slight deviation vs. MoCs
Oct-2015 list | Source: CEA, Ministry of Power, Ministry of Coal, Nomura research
27
Hinduja
Ind. Bharat Pow er
India Bulls
Vedanta (Sterlite)
ACB (India)
ACB (India)
Athena
Corporate Pow er
Corporate Pow er
DVC
Hinduja
Ind. Bharat Pow er
India Bulls
India Bulls
Jhabua Pow er Ltd
JPVL
JPVL
JPVL
KVK. Nilanchal Pow er
Lanco
Lanco
Lanco
Project Nam e
Vizag TPP U-1
Ind Bharat U-I
Nasik U-2
Balco Unit 1-2
TRN Energy U-1
TRN Energy U-2
Singhtarai U-1
Matrishi, U-1
Matrishi, U-2
Bokaro Exp U-1
Vizag TPP U-2
Ind Bharat U-2
Nasik U-3
Nasik U-4
Jhabua Unit-1
Bara TPP U-1
Bara TPP U-2
Bara TPP U-3
Nilanchal U-1
Babandh U-1
Amarkantak U3
Amarkantak U4
Linked
LOA Qty
Capacity (MW)
(MT)
520
2.3
350
1.5
270
1.0
600
2.6
300
1.3
300
1.3
600
2.5
270
1.0
270
1.0
500
2.3
520
2.3
350
1.5
270
1.0
270
1.0
600
2.7
660
2.3
660
2.3
660
2.3
350
3.0
660
1.4
660
2.6
660
2.6
Note: MoC document mentions overall capacity of the plant where we capture
the % of linked capacity, thereby the slight deviation vs. MoCs Oct-2015 list
S. No. Developer
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
NLC JV (NPTL)
NTPC
NTPC
NTPC
NTPC JV
NTPV JV
NTPV JV
RKM Pow ergen
RKM Pow ergen
RKM Pow ergen
SKS Ispat
SKS Ispat
Thermal Pow ertech
UPRVUNL
UPRVUNL
Vedanta (Sterlite)
Vedanta (Sterlite)
Project Name
Linked
LOA Qty
Capacity (MW)
(MT)
Bandakhar TPP
300
1.3
Thamminapatnam TPP U-3
210
0.7
Anuppur U-1
1200
4.2
Tuticorin U-2
Barh U-1
Bongaigaon U-1
Bongaigaon U-2
Muzaffarpur Ext. U-4
Nabinagar U-1
Nabinagar U-2
Uchpinda U-1
Uchpinda U-2
Uchpinda U-3
Binjkote TPP U-1
Binjkote TPP U-2
Painampuram U-2
Anpara D U-6
Anpara D U-7
Talw andi Sabo U-2
Talw andi Sabo U-3
Grand Total
500
660
250
250
195
250
250
360
360
180
300
300
462
500
500
660
480
18,467
1.5
3.3
0.5
0.5
0.7
1.3
1.3
1.6
1.6
0.8
1.4
1.4
1.1
1.7
1.7
2.6
2.6
73.7
Note: MoC document mentions overall capacity of the plant where we capture the
% of linked capacity, thereby the slight deviation vs. MoCs Oct-2015 list
Source: CEA, Ministry of Coal, Nomura research
28
Developer
Project Nam e
Linked
Capacity (MW)
140
660
270
270
500
600
500
600
200
350
500
500
600
600
135
400
600
500
600
600
250
180
150
135
9,840
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
MSPGCL
MSPGCL
GMR Chattisgarh
Essar
Jindal India
KPCL
KPCL
JV of SCCL & Telangana
MSPGCL
MSPGCL
MSPGCL
GMR
Monnet Ispat
GVK Pow er
GVK Pow er
Essar
Monnet Ispat
Project Nam e
Kaw ai U-2,3
Tiroda-II, U-2
Tiroda-II, U-3
Bellary U-3
Lalitpur U-1
Lalitpur U-2
Total
Chandrapur U-8
Koradi U-8
Raikheda U-1
Mahan U-1
Derang U-2
Yermarus U-1
Yermarus U-2
Adilabad U-1
Koradi U-9
Chandrapur U-9
Koradi U-10
Raikheda U-2
Malibrahmani U-2
Goindw al Sahib U-1
Goindw al Sahib U-2
Mahan U-2
Malibrahmani U-1
Total
Grand Total
Linked
Capacity (MW)
1320
660
660
700
660
660
4,660
500
660
685
600
600
800
800
600
660
500
660
685
525
270
270
600
525
9,940
14,600
29
Appendix A-1
Analyst Certification
We, Anirudh Gangahar and Archit Singhal, hereby certify (1) that the views expressed in this Research report accurately reflect our personal views about any or all of the subject securities or issuers referred
to in this Research report, (2) no part of our compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this Research report and (3) no part of our
compensation is tied to any specific investment banking transactions performed by Nomura Securities International, Inc., Nomura International plc or any other Nomura Group company.
Ticker
Price
Price date
Stock rating
Sector rating
Coal India
COAL IN
285.6 INR
09-May-2016
Buy
N/A
Disclosures
Rating
Target price
310.00
401.00
407.00
417.00
443.00
315.00
320.00
Closing price
287.75
335.05
336.60
370.70
404.30
290.90
290.25
For explanation of ratings refer to the stock rating keys located after chart(s)
Valuation Methodology Our 12-month TP of INR310 is derived from a sum of the parts of: 1) FCFF of its 7.2bn tons of proven coal reserves as of FY17F (INR127/share); PV of its 8.3bn tons of probable coal
reserves (INR45/share); fair value of its balance coal resources of 45.4bn tons per the JORC Code (INR65/share); and FY17F cash on hand (INR73/share). The benchmark for this stock is the MSCI India
Index.
Risks that may impede the achievement of the target price [1] Divestment of up to a 10% stake in CIL in FY17 remains on GoIs agenda; the lingering overhang could continue to cap stock price
performance. [2] Inability to raise notified coal prices sufficiently due to regulatory/policy diktats and drop in e-auction realizations leads to a progressive decline in blended realization. [3] Adverse policy
decisions by the GoI such as curtailing offtake via e-auction, directing the deployment of cash in unrelated / sub-optimal avenues with ambiguous returns profile. [4] Delay in start-up of trunk rail links and
evacuation infrastructure critical for sustaining a high single digit y-y rise in offtake. [5] Demand for coal continues to remain lacklustre in the medium-term, entailing lower-than forecast offtake + pressure on
pricing & year-end incentives. [6] Downtrend in seaborne thermal coal prices continues, thereby reducing the headroom to revise notified coal prices and put further pressure on e-auction realizations.
30
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31
Explanation of Nomura's equity research rating system in Japan and Asia ex-Japan prior to 21 October 2013
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