Coal India Ltd., reportedly rose to a record in Mumbai and the company’s profit would rise 12% in the year ending March even as output declines. Coal India gained as much as 7% to Rs. 371.40 and was at Rs. 357.85 early today. That’s the highest level since the stock started trading on Nov. 4.
According to reports, the profit may rise to Rs. 110bn rupees ($2.45 billion) after an increase in coal prices and savings from a reduction in staff. Production may decline to 430mn metric tons, a drop of 1mn tons from a year earlier.
Dipesh Dipu, director energy and resources at Deloitte Touche Tohmatsu India Pvt. was quoted as saying “The company has improved profitability through its pricing. These will certainly improve the margins. These improvements in margins may have been reflected in the market value of Coal India stocks.”
Coal India’s production would have been higher by 18mn tons this financial year if environmental restrictions aimed at curbing pollution hadn’t halted mining in some areas. Effective 2011, Coal India has revised the prices of coal 30% upward on average, while for higher grades of coal, this has been steep at nearly 200 percent to align the prices to import parity levels, added Dipesh Dipu.
The increase in coal prices, effective Feb. 27, will boost revenue by about Rs. 6.5bn in the year ending March 31 and about Rs. 62bn in the next financial year, Kolkata-
based Coal India was quoted it to the BSE.
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