India’s national coal mining company Coal India is expecting revenue growth to the tune of 6 per cent in the next three fiscals. The nominal growth is on the back of financial burden of the increased labour wage and salaries of executives and new pricing formula.
Senior Coal India officials said the total financial burden of the wages and executive salary is Rs 7,000 crore. “The PBT this fiscal would be same as last year. But we expect a healthy revenue growth of 5-6 per cent for another 2-3 years,” said the official.
Breather could come from the new pricing formula. Coal India increased the prices of thermal coal by 9 per cent across grades. The company is expected to earn an additional Rs 1,965 crore on account of the price hike.
Officials, however, said the new pricing formula would help avoid any increase in power price escalation. Adopting a new formula, Coal India would sell coal on basis of energy content and not per tonne basis. The price of coal for every grade has been decided as per the average energy content in that grade.
Coal India's production during the current quarter is projected at 184.10 million tonne (MT), according to a company report. The company in the first quarter saw a negative growth 5.4 per cent at 118.84 MT as against 125.67 MT in the year-ago quarter.
“The negative growth in the first quarter was witnessed due to lack of demand. There is no shortage of coal in the country and that there is enough coal for everyone. There is not even lack of demand,” said an official.
Coal India is expected to touch 568 million tonne this fiscal with more than 20 per cent of the production as inventory amount. In the coming fiscal, the target is 650 million tonne, of which 525 million tonne is demanded by the power sector.
The report prepared by the company said the off take during the current quarter would be 159 million tonne, an increase of 5 per cent over the year-ago period. The dispatch to power sector is expected at 121 million tonne in the current quarter.
Coal India started 3 new mines in the current fiscal years and is looking to commission 4-5 more mega mines in the coming fiscal year. The ministry of coal recently allotted 11 new mines to Coal India. “Every subsidiary of Coal India is targeted to be a 100 million tonne company and these new mines would help achieve that,” said an executive.