Better days ahead for Coal India on closure of unviable mines

Improving realisations, closure of unviable mines to drive earnings

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Coal India’s performance in the December quarter marks a recovery, it was better than expected on the profitability front and could prop up investor sentiment. Earlier, the firm’s performance was affected by destocking of coal inventories by power sector customers, wage hike provisioning and grade slippages-related issues. This affected investor sentiment as well. 

Reported sales volumes grew 7 per cent, aided by increased supplies to the power sector. The proportion of supplies, under fuel supply agreements (FSAs), to power sector customers — cheaper by 20 per cent — weighed on realisations. But higher e-auction realisations helped sustain