On our normalised earnings estimates (adjusted for OB removal adjustment and excluding potential incidence of a mining tax), the stock trades at FY14f 8.0x P/E and 3.5x EV/ebitda.
CIL released production and offtake performance for December. At 44.5 million tonne, coal production was up 1.4% y-o-y, but 13% below the company's target. Coal offtake stood at 42.9 million tonnes, up 1.9% y-o-y but 1.4% below CIL’s target. The production shortfall for December was on account of CCL whereas offtake shortfall was on account of CCL and MCL (contract-labour related constraints in despatches).
For the nine months (Apr-December) of FY14, coal output was up 3.3% y-o-y (10.3 million tonne) and coal offtake was up 2.2% y-o-y (7.3 million tonne). Nine months FY14, production /offtake is 4.6%/3.5% below CIL’s own target. In absolute terms, the production /offtake shortfall is 15.2 million tonne/12.4 million tonne, respectively.