Coal India Q4FY18 result disappoints, PAT drops 52%; Govt reduces stake; share price falls 3%

State-owned Coal India faced investors heat in last few minutes of Tuesday’s trading session on stock exchanges. The share price of this major coal producer dropped by over 3% on BSE after the company announced the fourth quarter ended March 2018 (Q4FY18) result. The reason behind such negative reaction of investors were due to disappointing earning Coal India recorded. The company’s consolidated net profit more than halved to Rs 1,295.34 crore in Q4FY18 which was a decline of 52.36% from Rs 2,718.80 crore in the corresponding period of previous year. Q4FY18 PAT was also weak as it fell by 56.89% from Rs 3,004.79 crore of preceding quarter. 

However, consolidated revenue from operation surged by 8.28% to Rs 26,909.17 crore during the quarter as against Rs 24,851.46 crore a year ago same period. Q4FY18 revenue grew by 24.33% versus Rs 21,643.28 crore of preceding quarter. 

Coal India’s Q4FY18 performance was a mixed bag, as it missed analysts estimate in terms of bottom-line but surpassed the prediction in regards to top-line. A Bloomberg poll of analysts expected PAT and revenue of the company to come in at Rs 4,341 crore and Rs 24,720 crore respectively. 

For FY18, PAT slipped by 24.35% to Rs 7,020.22 crore as against Rs 9,279.77 crore in FY17, whereas revenue was at Rs 87,268.57 crore higher by 3.89% in current fiscal versus Rs 83,998.73 crore in previous fiscal. 

During the quarter, employee benefit expenses included a provision of Rs 646.87 crore and Rs 899.14 crore respectively towards pay revision of the executive employees. 

In the fiscal year end, government has further disinvested 0.31% of total equity share capital equivalent to 19,299,613 number of equity shares by way of placement of shares in Bharat 22-ETF and post such disinvestment government now holds 78.546% in Coal India. 

Coal India paid interim dividend of Rs 16.50 per share at a face value of Rs 10 each amounting to Rs 10,242.24 crore. The board of directors have recommended such interim dividend already paid, as final dividend and no additional dividend has been recommended in the year 2017-18. 

Considering the above, investors removed their money from Coal India so much so that it dropped by 2.87% and also clocked intraday low of Rs 276.75 crore on BSE. However, the share price ended at Rs 282.15 per piece down by 0.98%.