Coal India shares continue to be sluggish ahead of March quarter earnings

Shares of Coal India showed sluggish movement even as the Street expects a good set of numbers from the company for the quarter ended March 2022, due later in the day.

At 12:31 pm, the stock is trading at Rs 181.20 apiece on the BSE, down over half a percent. Coal India shares have been losing for the last three consecutive sessions and have still managed to outperform the sector by almost a percent.

Coal India intraday stock chart (source: BSE)

As per a CNBC-TV18 poll, Coal India’s profit for the March quarter is expected to come in at Rs 5,400 crore as against Rs 4,589 crore in Q4FY21. Its margin is expected to expand marginally by around 200 basis points at 25.91 percent on a year-on-year basis.

The company has been brought to centerstage in the last few months as the country continues to battle an ongoing power crunch in many parts amid a surge in demand for electricity.

Coal India has come to the rescue, by stepping up its output in first half of May by 34.4 percent to 26.4 million tonne. India’s coal production in the first two weeks of May has increased to around 34 million tonne, thereby leading to 37.18 million tonne of coal dispatches to power companies.

As per a Reuters report, the state-run company is expected to open what will be one of the biggest coal mines in the country this year. Output from the new Siarmal mine in eastern Odisha state would rise gradually, reaching a capacity of 50 million tonne in about five to seven years.

The Power Ministry has urged the Ministry of Coal to take steps for increasing output by 10 to 12 percent from Coal India Ltd and its arm Singareni Collieries Company Ltd (SCCL) this fiscal year as electricity outages are hurting economic revival.

"Power Ministry has asked the Coal Ministry to raise CIL's and SCCL's output for the power sector by at least 10-12 percent in the current financial year to ensure uninterrupted power supply and prevent any outages that could hurt country's economic revival," a source said.