Bookmarks - Bookmarkblogs
COAL INDIA :CMP 378.25 SHORT TERM TARGET:400LONG TERM TARGET:447
· Accessto 64.3b tonnes of reserves, representing ~6% share of global proven reserves,and production (largest global reserves and production).
· Reservesto production (RP) ratio of 50 years (extractable reserves) and 122 years(proved reserves) provides further growth option, as ~40% of proved resourceshave not been considered for mining studies.
· CILis well placed to benefit from its dominant position in the Indian coal miningsector.However, the challenges are many, and revolve around production ramp-upbeing impacted by Naxalite movements, stringent environment norms, etc;feasibility of price increases given the extended implications; infrastructurebottlenecks, 26% sharing of profit with locals under new mining act, etc. Whilethe challenges are many and could impact the growth in the medium term, webelieve that they are surmountable over the longer term.
· Groupof Ministers (GoM) has approved the Draft Mines and Minerals Development Regulation(MMDR) bill which stipulates that coal mining companies would have to share 26%of mining profits of the previous year with the local population.
· COALINDIA’S Net profit will be 6-7% of its net sales and an impact due to newmining policy on of 10-11% in FY12 EPS.
· CoalIndia’s stock price has corrected significantly by 10% to Rs357 on July 8 onthe back of this development.
· Keyhighlights:
FINANCIAL OUT LOOK:Y/E March | 2011 | 2012E | 2013E |
Sales (INR b) | 502 | 606 | 695 |
EBITDA (INR b) | 135 | 167 | 205 |
EPS (INR) | 17.3 | 22.1 | 27.7 |
EPS Gr. (%) | 11.2 | 27.9 | 25.2 |
P/E | 22.7 | 17.7 | 14.2 |
P/BV | 6.8 | 5.8 | 4.5 |
EV/EBITDA | 13.5 | 11.7 | 8.9 |
RoE (%) | 26.4 | 26.3 | 26.2 |
RoCE (%) | 54.2 | 53.4 | 50.9 |
0 comments:
Post a Comment