Coal India Ltd. (COAL), the world’s largest producer of the fuel, reported quarterly profit that beat analysts’ estimates after output and sales advanced.
Net income rose to 44.7 billion rupees ($807.7 million), or 7.07 rupees a share, last quarter from 41.4 billion rupees, or 6.56 rupees, a year earlier, the Kolkata-based company said today in a filing. That beat the 42.1 billion-rupee median estimate of 24 analysts surveyed by Bloomberg.
The state-run company, which produces more than 80 percent of India’s coal, has boosted output to take advantage of higher prices, and plans further expansion to meet demand from power plants and steel mills. The results mark a turnaround from late last year, when operations were hampered by heavy monsoon rains.
“The future looks more forthcoming,” Chirag Shah, an analyst at Barclays Plc in Mumbai, said before today’s earnings release. “There is a clear push by the government to improve the performance of the company.”
Sales volumes rose 6.4 percent to 113 million metric tons in the quarter, fueling a 14 percent jump in revenue to 165 billion rupees, according to the statement. Coal India increased output 6.4 percent to 102.5 million tons, and plans to raise production by 6.4 percent this year.
Coal India dropped 0.3 percent to 347.65 rupees in Mumbai trading before the release. The stock has added 16 percent this year, compared with a 14 percent gain for the benchmark Sensex (SENSEX) index.
Employee expenses rose 26 percent to 61.3 billion rupees after the company increased wages for non-executive staff, according to the statement.
Coal India, which employs 371,546 workers, agreed to increase wages by about 30 percent from July last year. The move will raise its wage bill by about 65 billion rupees annually, former Chairman Nirmal Chandra Jha said in January.