Coal India targets rake availability of 227/day

Coal India targets rake availability of 227/day

Some good news is certainly in the offing for Coal India in terms of rake availability. In a meet with analysts, the management said that Railways is targeting to raise rake availability for Coal India to around 227 rakes/day for FY16.

The rake availability from Railways for Coal India has improved to around 200 rakes/day in FY16(year to date), but remains lower than the company’s requirement of around 234 rakes/day to meet FY16 volume targets, according to CLSA.

The management also indicated that in case railway rake availability falls short of Coal India’s requirements, the company could consider offering more coal via e-auctions or selling coal at mine-head basis.

As far as the impact of wage revisions are concerned, the management believes that provisions from them could start in the second quarter of the next fiscal (FY17). The management also indicated that the volume target indicated earlier is very well on track.

“CIL is on track to achieve FY16 production target of around 550 million tonnes,” the management told analysts. IDFC, however, believes that the volume targets set by the management for FY20 is aggressive. “CIL’s FY20 production target of 908 million tonnes implies a CAGR of 13.2 per cent over FY15-19 (estimated) which, we believe, is aggressive,” IDFC said.

As far as the capital expenditure plans are concerned, CIL is likely to spend around Rs 11,000 crore. “Capex on core mining activities is likely to be around Rs 6,000 crore, while total capex, including the spend on procurement of wagons, could be up to Rs 11,000 crore depending on the timing of wagon procurement. Over the next three years, capex could be around Rs 35,000 crore, including that for procurement of wagons,” the management told analysts.

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