Ladies and gentlemen, good day and welcome to Coal India Limited Q3 FY24 earnings conference call hosted by ICICI Securities. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Dixit from ICICI Securities. Thank you and over to you, sir.
Good afternoon, everyone, and thanks for attending the call today. At the outset, I would like to thank the management of Coal India for giving us an opportunity to host this call. From the management side today, we have Shri P.M.Prasad , Chairman, Sri Mukesh Choudhary, Director Mining, Sri Mukesh Agrawal, Director Finance, and Shri Dubey , Company Secretary. The format of the call will be that management will open with a few an interactive Q&A. Without much I do, I would like to hand over the call to Mr. Dubey to take it forward. Over to you, sir.
Yeah, good afternoon, Mr. Amit. At the outset, I welcome all the participants. The copy of the corporate presentation has already been uploaded in NSE and BSE and also in company's websites. Post completion of meeting, the copy of transcript and video recording also be uploaded in NSE and also websites. Before we formally start the meeting, I would just love to hear a cautionary statement. Kindly note that some of the matters to be discussed today are forward-looking relating to implementation of strategic actions and other information on the future business development and commercial performance. In this regard, a number of these uncertainties and other important factors may cause actual development and results to vary materially from expectations. Accordingly, CIL undertakes no obligation to publicly revise any forward-looking statements to reflect in future events or circumstances as the case to be.
The duration of this call is around 50-60 minutes. Before we start, I would request Chairman for his opening remarks, sir.
Just before that, just make a correction, Shri Mukesh Choudhary, Director of Marketing, is joining. Good afternoon all. And the first nine months report, you see, it is highest ever nine months coal production of 531.90 million tons and overburden of 1,404.85 million cubic meters, with a growth in coal production 11% and in overburden it is 22%. Similarly, offtake also there is a growth of around 8%. It is also highest to power dispatches, 454.03 million tons. Highest ever nine months profit, it is PBT of INR 31,937 crore and PAT of INR 23,849 crore. This is also increase of PBT is INR 1,579 crore, that is 5% over previous year during the same period. Highest ever nine months revenue from operations and net sales, highest ever revenue from operations of INR 104,914 crore in nine months and increase of INR 4,814 crore, that is 5% over previous year.
Net sales also, there is an increase of 4%. Besides this, CAPEX also, we have achieved CIL achieved a CAPEX of INR 5,702 crore compared to INR 4,000 crore last year in the last quarter. Overall also, we are set to achieve INR 16,500 crore in this financial year. And CIL has bagged around 300 MW of solar project of Gujarat Industries Power Company Limited at Khavda, Gujarat through e-auction held on 25th January 2024. Besides this, there are other things also. Market capitalization of Coal India stood at INR 231,719 crore on 31st December 2023. And the board has also approved, we all know, a second interim dividend of INR 5.25 per share. With this total interim dividend for financial year 2023-24 is INR 20.50 per share, that is 205% of face value. This is all about up to the first nine months. Now we are open.
You can ask any questions.
Yeah, Mr. Amit, you can formally start the interaction, please.
Yeah, please then start the question and answer session.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets only while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Alok Deora from. Please go ahead.
Hi, good afternoon. So sir, congratulations on very good numbers. So I just had a first question on the volume side. So the volume so far has been very strong and we had guided for around 780 million tons. Any change on the numbers or we would largely be achieving that?
Good afternoon, Sri Alok. We are kept at target. Another 39 days to go. 780 million tons is our target and we are all set to go. But there is one company, SCCL. Five companies are already ahead of the target. One company, SCCL, there is due to some land shortage initially. Now there is no issue, but around 8-9 million tons, we are a little bit lagging behind. That comes to around 171 million tons around right now. But some few months, the EC clearance is also being ended. So we are trying for 10% growth is already there to keep and to keep the momentum. Five companies for sure it is achieving targets. In SCCL, there is an issue in initially the mega projects, two projects.
Hence, though there is a growth in that company, more than 10%-13% growth, but the target set is to achieve 197 million tons. Last year they could achieve 162, previous year 147. So 147, 162, that is a huge jump last year, FY23. Again, 25 million, again huge jump. But there may be some little around 10 million, 8-9 million gap may be there. But we are trying to make up in other two, three companies at least one to two million. So approximately around 770 million it is there for sure. But we are trying to keep so that last 39 days, if everything goes well, we will try to minimize the gap also.
Sure, sure, sure. Next year again, 850, we'll largely maintain that target.
850, now ministry has 838 because of huge stocks. In Talcher field, we are adding every day 1,000,000 tons stock. So our powerhouse stock, it has grown more than 38 million tons. It is also highest ever by this time in any previous year since we want this rack supplies also to be smooth. Somehow 4-5 racks at Talcher and 4-5 racks at Korba, we are getting little less. However, for them also there is a growth. With that growth also, coal stock at both powerhouse and at our side, both have increased this time. So with that, keeping that 838 million tons, one target is kept instead of 850 so that it will again be reviewed in first week of April in financial year.
Sure. And sir, this e-auction volume, if we see this quarter was close to or quite less than what we had given as a target for second half of 15% of the volumes which we'll be doing through the e-auction route. So any comments there because we are looking at a 15% e-auction volume in second half. So how do we see it in the fourth quarter now and why has it been a little oversight?
In February, it is 17%.
Till 15th February.
Till 15th February, it is 17%. It is close to that 15%, whatever you are telling, it is close to that, but subject to the demand, it may vary little plus minus.
Also increase further.
It may increase also in.
Further increase. It was 13% in January and then it has increased to 17% in February from 1st to 15th February. It is further increasing. And as the production is increasing, it may reach 20% also. Got it. So 4Q will be close to 15% also?
Yeah, around.
Yes. Okay. Just last question. So the premium, e-auction premium, we saw a pretty sharp jump in the third quarter of close to it moving close to 117% also. So that will again now come down because of your increase in the volume through the e-auction route? How do we see the e-auction premium moving?
Slightly it will come down.
Okay, okay. How has it been in January and February, if you can just indicate some number?
Around 36%-48% it is varying, but we are having it in that range.
36%-48%?
Yeah. For the full year, the average is around 80%. For January and February, the premiums are less.
Got it, got it. All right. Thank you so much all the way.
Thank you.
Thank you. The next question is from the line of Meet Parikh, who's an individual investor. Please go ahead.
Good afternoon. Thank you for having my question. So the first question I wanted to ask was again regarding e-auction premium. So as volumes approach 1 billion tons in 2 years, so what kind of e-auction premium movement do you expect? And once this 1 billion ton target is hit, it seems very imminent. So after that, what is the could you give some guidance on that? Because all these FMC projects you are doing seem very possible next year. So that is the question one.
This E-Auction premiums may vary subject to the demand quarter to quarter, number one. Which is 1 million target what you are referring? 1 million shortfall regarding shortfall or?
1 billion.
One billion. One billion, we are on course. Next year, it is 838 million tons. It is just revised, but subject to the demand. 850 initially, 1 BT, it is 850. Recently, due to the present scenario of our coal stocks at power plants and subject to demand, it is kept as 838 million tons instead of 850 next year. So we are on course to achieve this and the preparations are going both for monsoon preparation also in 2024 monsoon. Also, we are working on it. Our tenders are in place and all the arrangements to face the monsoon by May 31st will be in place so that monsoon also there will be smooth production and dispatches. We will try to achieve 838 million next year.
Is that right? I meant to ask in the way that since 1 billion tons will come online, so that will be huge coal stock. So will that affect the demand of e-auction coal, bringing the premium down over time is what I was asking?
Definitely. Stocks at power plants, if it piles up and our side also stocks are there, as per the demand appetite, it is vis-à-vis related with the appetite that auction premiums.
Exactly. Thank you. And sir, the second thing I wanted to ask was the dividend policy. So what is the dividend on which you the policy on which you decide dividend? This is like PAT plus non-cash expenses including OBR, and you reduce CAPEX on that?
CAPEX is not reduced. Dividend policy is already hosted on the website. So dividend, we are deciding based on the requirement and the CAPEX in the future year. Accordingly, we are balancing the shareholder expectation as well as the company's CAPEX program.
Okay. And sir, last question I wanted to ask was Indian coal in comparison to international coal. Could you give a comparison of what is gross calorific value there and what kind of what is the benchmark that you use for comparing our prices to international coal?
Regarding ash content, you should understand Indian coal is of predominantly high ash content. Say in companies like Mahanadi, some part of SCCL, CCL, it may be around 42%. Internationally, if you see some countries, there may be 8%-10%. So same level comparison cannot be there, number one. And even if you import also, import also, there is a band. Band-wise calorific value only, either it is Indian nation coal, Australian coal, you see particular bands, particular GCV that is being the rates are being numbered. So it cannot be but in India also, in ECL, there is good quality. G6 to G8 band is there where our quality is also very good. Similarly, in Mahanadi, it is little inferior, but it is very much friendly to thermal power plants. So it varies.
Okay, okay, sir. And what is the benchmark you use for that to compare the international price? Is it that band-wise or is it like a common benchmark that you observe?
Band-wise. Calorific value is definitely taken into account along with ash percentage.
Okay. Thank you so much, sir. Thank you.
Thank you. Thank you.
Thank you. The next question is from the line of Dixit Doshi from Whitestone Financial Advisors Pvt Ltd. Please go ahead.
Yeah. Sir, firstly, just a clarification. You mentioned for January and February, the e-auction premium has come down to 30% It's around 36%-50%. In different companies, we are getting different this thing. February is still going on. So it's initial days only, but around 50% was there in January and in February for the first 15 days. So it is more than 100% in the Q3, right?
More than 100%, no. Q3, it was yeah, yes.
Okay, okay. Now my second question is regarding the rare earth and lithium and other mines. So are we doing something in Australia and also in India also, government is going to provide such mines in J&K and other parts of India? So what we are planning over there?
In India, first I will tell. In three blocks, we are going to participate for auction for exploration first. We are going to do this auction originally. The date was 21st. Now it is revised to 26th. Ministry of Mines is conducting an e-auction. So we are participating in three blocks, number one. In Australia, our team has visited and seen one or two areas and is there in different talks. So it is in the preliminary stage only.
Okay. In India, you mentioned three blocks. These are of which mineral?
It is these critical minerals only, all the three.
Critical mineral. Okay. So these are the JNK or some other part?
It is not exactly JNK. Different states it is spread over.
Okay, okay. And this last date you mentioned is 26th February?
26th Feb.
Okay, okay. That's it from my side. Thanks.
Thank you.
Thank you. The next question is from the line of Indrajit from CLSA. Please go ahead.
Hi, sir. Thanks for the opportunity. In a press release, you have mentioned that you're looking to change the accounting policy for shipping activity adjustments. So if you can highlight what exactly are we trying to do here and what could be the impact?
This is in correspondence to international accountancy standards. There are some observations going on last 3-4 years. We wanted to rectify and follow the international accounting policy. We have adopted this and we are going to comply with the standards as mentioned in the international standards of accounting along with the Indian context and Institute of Chartered Accountants of India also. We are referred, we are taking opinion, and we are following that.
In that case, sir, OBR, shipping activity adjustment amount will go to zero or how will it happen?
For three years, preceding three years, we have taken into account for correction. Going forward, by implementing the standards mentioned, we will be taking the course and we are following this. As per the Ind AS, we have consulted the Institute of Chartered Accountants and with their advice and this legal advice we have taken, and we are following that.
Lastly, sir, on the shipping activity adjustment, because it's a non-cash provision, do we get tax shield on this? Is it an allowable expense under the Income Tax Act?
Actually, this is a case. Different companies are situated in different states and different income tax authorities have taken different view. In some of the cases, it has already been disallowed. So we had already paid the tax and in some of the cases, it has been allowed. So overall, it will be some impact on the taxation first, but it will be not much impact because of some of the cases, it has been allowed. In some of the cases, it has been disallowed. So it will be a mix. So some impact will be there when we will assess what will be the total quantum at the year-end. Accordingly, taxation can be worked out.
Sure. And lastly, on the balance sheet, there is a significant liability we have on this, right? So if and when that gets reversed, there could be a tax implication on that as well, right?
As I already mentioned, that impact, we are working on it. If the reversal will take place, then naturally, some income tax impact will come in the current year.
Sure. Thank you so much. That's all from my side.
Thank you. Thank you.
Thank you. The next question is from the line of Amit Lahoti from Emkay. Please go ahead.
Thanks for taking my question. Sir, what is your CAPEX target for FY24 and FY25?
It is almost INR 17,500 crore. This is.
For both the years?
1,500 crore more, 17,500.
My second question is on the strike that happened last week. Do we have any update there? What is going on?
There is strike only for one single day. Some four unions have given. This is with respect to the national level issues also, not primarily to Coal India. As countries, some other issues, they have in for one day, they have for a couple of they have gone as per their party's instruction, they have participated, but almost 80%-85% production at some subsidiaries, it is even 95% also we achieved. Only marginal impact was there.
Okay. Thank you. I'm done.
Thank you. The next question is from the line of Venkatesh Subramanian from Logitree Investment Advisors. Please go ahead.
Yes, sir. Sir, good afternoon. Congratulations on a good performance. We are actually quite impressed with the way Coal India is evolving as a company. That's a large company performing so beautifully. Best wishes to you, sir. That's one. Sir, my question is in terms of these e-auction premiums. I know that we can't really measure it quarter-on-quarter, but until December, we had 116% premium in terms of we have. And suddenly, you are talking about 40%-50%. Is there any particular reason why it's happening that way? And what do you estimate it for the fourth quarter going forward? I mean, the next quarter?
Actually, the premiums, they are linked. They were earlier being linked with the imported coal prices. So when the imported coal prices for this band of 4,200 went up and down, the premiums also moved in tandem with them. Now, with increased availability of domestic coal, the premiums have started now actually getting away from the linkage with the imported coal prices. 48% was from 1st January to 15th February, we have received. So maybe in the month of January, somewhere it was around 60% or so. Going ahead, we think this is going to be the order of the day somewhere around 40%-50%. So that's why we have actually started the non-regulated sector linkages once again, which we used to do every year. Now, we have started twice in a year.
After completion of the six tranches, we already started seven tranches and sponge, iron, cement. These subsectors have already been completed and CPP sector is right now going on. In order to look for more non-power consumers, we are offering more rounds of NRS linkages and we are conducting them even more frequently.
Okay. So which means that so far, our realization is broadly, the blended realization is about INR 1,724 per ton. So considering that going forward, the e-auction premiums might moderate downwards, would you still have some strategy internally to maintain the overall realization, sir, in FY25?
The overall realization means we have to offer more coal to the non-regulated sector where the premiums are very high. We are getting locked in at around 48% or so, probably around 30%-40%, which earlier used to be somewhere around 10%-20%. Volumes are going to help us.
Okay. Broadly, we should be able to maintain because also, we have quite a lot of CAPEX planned. I don't think it's a cause for worry according to you, yeah?
Definitely.
Okay. Super. So second question is INR 80,000 crore of CAPEX you have planned for the next few years. Most of it will be internal accrual, sir?
It is other. One is land acquisition and these FMC projects, railway lines. And coal gasification is also coming. Once this is materialized, one coal gasification along with BHEL, we are in a JV. One is GAIL, we are in a JV. All these come to end. Solar, we are going for initially 3,000 megawatts. Subsequently, we will increase. Primarily, diversification project will be a basket of the internal accrual and the debt, whereas all the expansion in the coal mines will be met from the internal accruals.
Okay. But considering that the kind of projections we have for FY2025 and FY2026, predominantly, I think internal accrual should take care of most of our needs. Would that be a right assumption, sir?
Yeah, you are right because we had just started the renewal. So not much debt will come in the 2025, but in the coming years, debt will increase in the renewal and gasification projects.
Okay. Do you have any plans, sir, going forward once we have coal, we have fuel energy, and then we have we are investing a lot in terms of alternative energy as well? Would you have that as a separate demerged entity or something in the future?
We had already some verticals are there for the renewable energy and other projects. For that, we had already subsidiaries companies are there. We had already formed the joint ventures and the new companies. Those will pursue that. We are not going to create any new subsidiary. It is not in our discussion right now.
Okay, sir. My last question is, sir, as per your internal blueprint strategic thinking, sir, where do you expect the broad price trend of coals over the next one or two years? Just a broad estimate. We don't need looking for not looking for accurate figures because it's market determined. But what is your internal estimate where you think it will settle down, sir, coal prices?
It's likely to stabilize at the current levels, and then it will depend on many future events also which are coming in 2036, which country is going to be the country where Olympics are going to be hosted and many other issues are there. But as of now, we understand that the current levels have stabilized and this trend should continue at least for a year or so.
Okay. Fine. Super, super. So thank you so much for taking my question, sir. All the best. Thanks.
Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead.
Yeah. Hi. Good afternoon. Thanks for the opportunity. So my question is a bit longer term. So at our level, we are looking to raise coal production to 1 billion tons, and then we have a lot of private captive coal mines which are also seeing a rise in production over the next couple of years. So if, let's say, what I understand is you're saying that there are some coal stocks have increased. So in years ahead, when more captive production comes in, how do you think there will be marketability of all this increased production that you have? And could it lead to a structural decline in the auction premiums in the countries? Just some thought on that.
Demand is increasing. You should understand the overall demand is there. So temporarily, sometimes the auctions, sometimes the accumulation is there and the monsoons also will be coming. So for sure, demand is also at this pace of growing, and we are also doing 10% growth. Even other players are also coming. They have to meet the demands. This impact, imports can be reduced.
80,000 megawatt plants are coming?
80,000 MW power plants are coming by 2030.
Already, we are asked to give 50 million tons more to power this year.
This year, we are giving more to power plants, and next year also, power plant projection is 50 million tons more. There is demand. There may be temporary phases in the supply of rakes. But overall, you can see appreciation in the last two years, Coal India is growing in double-digit.
No, absolutely. I completely appreciate that and congratulations there. But my question was more on that side only, that if supply is growing more than 10% and obviously, there is growth of renewables and also coal demand per se, can it meet the supply growth or will it lag the supply growth? Is there some thought that you have or some work that you've done on that?
Then it will not lag. It will be definitely meeting the demands. You can appreciate imports are not increased in Thermal Coal.
200 million tons, we need to see.
One more factor will play in the coming year. As the economy is growing all round, infrastructure is growing, the demand of the power is going to bounce to increase. So one factor, this increasing demand per capita will lead to this factor. And on the other hand, new power sectors which are coming will also multiply the demand. So ultimately, it will increase the demand for the coal.
Sure. Understood. And also on import substitutability, how much of coal coming from Indonesia or wherever you think can be replaced with domestic coal?
Around 50 million tons of coking coal which is coming to the country may probably continue because of the limited availability of high-grade coking coal required by the steel sector. There are certain plants on the coast which are actually based on imported coal for their generation. Their boilers are designed accordingly. These plants may also continue to have imported coal. Other than that, we are still looking for a target of somewhere around 175-200 million tons of coal which is a substitutable type of coal which, if available at the right prices and the right time, should be able to substitute that. Not only the current domestic demand, but also the 200-225 million tons which the country is importing. That also is being targeted by us so that we reduce our reliance on imports.
So, entire, that 150-200 million tons is replaceable because a lot of that will be coastal plants and all, as you said?
This is what you said, 225. So out of that 225, somewhere around 50 million tons we'll get for coking coal and another 25-40 million tons maybe somewhere for coastal plants or maybe some of the consumers who require specifically very high, so in case of high-grade, also, we have now started offering high-grade coals from our side to non-regulated sector consumers who want high-grade coal like cement sector, etc. So this also, in a planned way, we are targeting those consumers who are actually importing high GCV coal.
Got it. Got it. And just the last one, and some logistics and all will also need to be improved, whatever the availability and all those issues that you've seen in the past?
Logistics are under improving regularly, whether it is commissioning of railway lines and sidings, FMC projects. Similarly, in land and environmental clearances, also, we are almost continuously pursuing. Overall, we are going to make it.
National Coal Logistics Policy?
Under the National Coal Logistics Plan, it is being implemented. It is under implementation.
Got it. Got it. Thanks a lot for all the answers. Thank you very much.
Thank you.
Thank you. The next question is from the line of Siddharth Gadekar from Equirus. Please go ahead.
Hi, sir. So first one, the washery part, so can you give an update on what is happening on that side of the business? And when can we see some higher volumes on the beneficiated coal part?
Washeries part, we are having few washeries under construction. One Madhuband washery is recently completed, commissioned. Right now, we are doing 5,000 tons per day, new washery. And two more washeries in BCCL are under construction. One Bhojudih. Bhojudih, it may be commissioned by July. So once it is completed next year, there will be increase in washing part. And one more washery is under started under construction, Patherdih II. But after a period of two years, the coking coal share will be increasing. We are around 10%-12% more than last year, but significant increase will be coming after the commissioning of new washeries. In CCL also, two washeries we have given LOA, both Dhori and Kathara. Some ECE and other statutory compliance are underway. Once this is done, for two years, it will be constructed.
Maybe FY27, there will be a growth from present level of 1.5-2 million washed coal. We will be going to around 6-7 million after 2 years. In Mahanadi, 1 non-coking coal washery just recently commissioned in Lakhanpur. There is a 10 million ton non-coking coal washery. There is demand and agreement with AP Genco and other Gencos. So its trial run has completed. So a 10 million ton non-coking coal washery will be added to our kitty.
Once all these capacities come online, maybe FY2027, 2028, what could be the peak beneficiated coal that we can produce, tentative number?
Our target is around 8 million tons by FY2030, but FY2027, FY2028, it may be around 6 million.
Okay.
Coking coal.
Okay. Yes. Okay. Got it.
Other than this non-coking coal which I mentioned in Lakhanpur, that is already commissioned. It will add in this 2024, 2025. FY 2025, it will be doing its complete as per capacity.
All right. So secondly, on the e-auction part, what has driven the e-auction rise in the third quarter? Because if you look at international prices also, they were relatively subdued during 3Q. So why did the e-auction premium jump very sharply in the third quarter?
Third quarter, if you see the power plant stock has come down to the minimum in the month of September, it has gone down below 19 million tons also. And the peak demand in the country at that point of time has hit 240 GW, which was the highest ever. So there was a substantial pull at that point of time.
Okay. Okay. Got it. Thank you.
Thank you. The next question is from the line of Ashish Kejriwal from Nuvama Wealth Management. Please go ahead.
Yeah. Hi. Thanks for the opportunity and many congratulations for the work which we have been doing for the last few years. 3 questions from my side. 1 is, obviously, employee costs, we have guided earlier that we could end up with around INR 46,000 crore. Are we still maintaining the guidance or is there any change for this year? And if you can give us a sense on next year's what could be the total employee cost depending on the situation that now 4%-5% employees are retiring every year. That's my first question, sir.
As the superannuations and additions of employees are taking place, it is bound to come down. We are expecting this year, employees' cost will be less than the last year to the tune of around INR 2,000 crore. The trend will continue in the near future also.
Okay. So it's fair to assume that FY25 employee cost would be at best equal to FY24 or less?
Yes, yes. You can say this.
Okay. Okay. Thanks. Secondly, sir, when we are talking about INR 17,500 crore CAPEX target for FY2025, is it possible to give some kind of breakdown between coal and non-coal?
Right now, it is not available. We will forward it.
Okay. Great. And sir, thirdly, for e-auction price, we mentioned that I think January, the average e-auction premium was something like 54%, but in absolute terms, I think it's around INR 2,700 per ton. So when we are talking about 36%-40% premium, is it possible to quantify on an absolute term? Because sometimes, because of the grade also, things change materially. So is it possible to quantify on absolute terms what's happening in February?
It's difficult to quantify on absolute terms because in the last quarter, we have asked the coal companies to offer around 20% of their monthly production there. The monthly production in absolute numbers, what we are getting is it's huge in Mahanadi Coalfields and SCCL where the grades are not very high. As of now, it's very difficult to quantify it in absolute numbers. Going ahead, maybe by middle of March or so, we'll be in a position to get those numbers.
Okay. So you mean to say that because grades are low, volumes are high, and that's the reason premium could be lower?
Yeah. Yeah. Yes.
Okay. That's great, sir. Thank you, sir. Thank you and all the best.
Thank you.
Thank you. The next question is from the line of Ketan Jain from Avendus Spark. Please go ahead.
Yeah. Good afternoon, sir. This 838 metric tons of target next year, is it production or dispatch target?
It is production. Dispatch also at the same range it will be. Dispatch also, it is 780, 780. So it is almost the same.
Okay. Next year also, 15% of the dispatch will be e-auction, right?
Yes. They're on. They're on. Maybe even more because if you are able to meet the demand, then the additional coal will definitely take it out in the auction.
Okay. And the possibility of giving that 15% within that, how much will be regulated the portion and non-regulated portion by volume?
As of now, we have got a requirement of 661 million tons for the regulated power sector. Then we have got FSA commitments, fuel supply agreements, long-term commitments of somewhere roughly around 100 million tons for non-regulated sector. The balanced quantities are always there, but out of this 100 million ton also, it depends on the demand and supply position for the consumer side. You can say that out of 838, 661 is our commitment for regulated sector. The rest all should go to non-regulated sector under different modes, either FSAs or through e-auctions.
Okay. Okay. Understood. And when you're talking about the CAPEX for 2025 at INR 17,500 crore, when I compare this number with the number given in the interim budget that came in the beginning of this month for Coal India, it said INR 15,500 crore as the CAPEX in that interim budget. So what is the reason for the difference between 15,500?
It may vary because solar also we are going and other new initiatives. It is just 1,000 in a year. It can be slightly. The payments have been submitted from 3-4 months before. Later on, we had fine-tuned.
Okay. Okay. So the actual number could be 17,500?
Yeah. Around. It is optimistic.
Right. And just to get a sense of the overall coal dispatch or production volume that Coal India does, what proportion would be this majority of the grade that we produce, which is grade 5, 6, 7? Sorry, grade 8, 9, 8 is 9, 10, 11 is what we produce the most. What will be the proportion of these grades on the overall volume?
11, 12, 11-17 is 70%. 11-17 is 70%. That is the most abundant quantity going for the thermal plants.
Okay. 11-17 is the most abundant and 70%. Okay. And typically, what grade is e-auction coal that you said?
All grades. All grades. All subsidiaries offer some quantity from their production. So all grades are being offered depending on the volumes which are being produced.
I'm asking, in e-auction, which is the predominant grade?
Naturally, because of that only, the G11 to G17 because m ore quantity is offered. Everything is being offered on proportionate basis. So.
Okay. So the same 70% proportion is in e-auction also?
Exactly. As of now, I don't have those figures, but it should go accordingly because all subsidiaries are offering some around 10%-20% of their annual production for e-auction.
No, what I'm asking is, in e-auction also, the grade mix is the same. That is, G11 to G17 makes up 70% of sales through e-auction also?
I can explain. Just say in MCL, there is no G7, G6 grade. So 100% whatever in their 15%, it is 100% it is G11 to G17. Similarly, if you go to ECL, maybe it may be varying, G6, G7, G8, their production in Sonepur Bazari. So it is subsidy-specific. But overall, as Coal India, you can see 15% is general what we are offering. Grades may vary percentages.
Okay. My next question is on employee cost.
Sorry to interrupt. May we request you to return to the question queue for the follow-up questions as there are several other.
You let many people ask several questions. You should have rechecked them also, right?
So there are still several other.
I know. What I'm asking is you let others also ask five, six questions.
Sir, I'm not.
No, I understand. This is Varani from Avendus. I understand, but.
Can you make it fast? Mr. Ketan, can you make it just fast, please?
Yeah. Just asking when we would be expecting the employee cost hike next?
Not now. Definitely not in these two years.
Okay. Thank you so much.
Thank you.
Thank you. The next question is from the line of Anupam Gupta from IIFL Securities. Please go ahead.
Just one question I have. In your presentation in the balance sheet, the receivables have jumped quite a bit. What's at INR 13,000 crore, start of the year to INR 17,000 crore now. What is driving that and where do you think it will settle given that you have excess inventory at your and at the power plants as well?
Yes. We are trying to pursue with all the agencies, whether it is NTPC, DVC. We are in continuous touch and we want to relay also. But some places, Tenughat, we have recently settled, long pending in case of Jharkhand. Similarly, with DVC, WBPDCL, we are in Mahagenco. We are in constant touch. So it is more or less it will be in the same range, not much of accumulating more than that.
Okay. Okay. That's all from my side, sir. Thank you.
Thank you.
Thank you. The next question is from the line of Prachi Chopra from Citigroup . Please go ahead.
Thank you. Just on the e-auction route, is there a cap on how much you can sell in the e-auction market?
Normally, Coal India is mandated to offer at least 10% of the production for e-auctions in order to develop the spot markets. But if the requirements of power sector and the linkage consumers of non-power is met, then this volume can increase up to 20% of their production.
Okay. And on the linkages or on the FSAs, so for the power and the non-power sector, you get penalized at below 80% or below 90%?
75%. Both sides.
On the power sector, sir?
Yeah.
Okay. So long as you supply 75% on either, there is no penalty. So that's what you're basically required to supply?
Yeah. On both sides.
So sorry, just to take this a little forward. So the fact that your e-auction volumes are going up, obviously, means that you're supplying closer to the ACQ, right? Right? Not 75%?
Yes.
Okay. Just last question. On the target that you have for 838 million tons next year, what is the breakup of the power and non-power as well as the, I mean, from a growth perspective, breakup or growth either?
661 power, you already mentioned. NRS, it is 100. Balance 67 also going to the same NRS sector.
Out of power regulated sector prices, 661 is the requirement they have given, and the balance will go to non-power. In 661 also, some of the coal we sell under SHAKTI for auctions for short-term power, etc. But that basket is different.
What is that number for the 780 for this year? What is the power requirement?
780,610 was the power requirement. We are going to supply more than that.
Understood. Thank you very much.
Thank you. The next question is from the line of Jitaksh Gupta from Tikri Investments. Please go ahead.
Sir, I have two questions. One is that your target is 838 million tons based on the demand projections. In case if the demand goes up beyond 838 million, will Coal India be in a position to supply more?
Definitely. Coal India will be in a position. We are continuously pursuing other clearances and other logistics. We are having 100 million, maybe 85 million stock by this March. So we have to see the dispatches also in place. So based on our stock position at our end, power plant end, and e-auction, whatever is given, e-auction is also almost it is 8%-9% growth. If demand is there, then definitely we will also try to liquidate the stock and we'll meet the demand.
Sir, my second question is that the FSA coal price increase was in 2018. Is there any proposal to increase the FSA coal price?
No. Right now, there is nothing.
8% we increase from G1 to G10. That's it.
Thank you, sir. All the best.
Thank you. Thank you.
Thank you. The next question is from the line of Shweta Dixit from Systematix Group. Please go ahead.
Hello. Hello, sir. Thank you for the opportunity. I just wanted to can you please repeat the CapEx number and the CapEx plans for next two years, FY25 and FY26? And any visibility on the volume numbers for FY26? Is there a target set?
It is more or less in the same range with slight increase. Once our coal gasification and other things materialize, it may be 18,000-18,500 range. This depends on the project execution, fixation of the operator who gets it. Once it is started, every year it will be increasing till the finishing of that project.
We can assume if you say I mean, is it expected to remain flat or we can take a nominal rate of around 4%-5% or lower than that?
Madam, initially, when the project starts, at that time, the CAPEX goes very sharp rise. After 2-3 years in the power sector, when the project is about to commission, then the CAPEX goes down. Similarly, in the solar, when the project is going, first 2 years, the CAPEX will be very fast, and then it will slow down. It will be almost increasing for next 3-4 years, and then after that, it will come down.
So sorry, sir. I was talking about volumes for FY26 actually. That is where I was assuming a growth number.
Around 18,000, madam, as you are telling. 17,500 next year. In FY26, it will be around 18,000.
Around. Okay.
Thank you. The next question is from the line of Anupam Gupta from IIFL Securities. Please go ahead.
Yes, sir.
Mr. Gupta, your line is unmuted. You can proceed with your question.
Probably we may take the last question as we are running short of time, okay?
Sure. The next question is from the line of Darshan Gangar from First Water Capital. Please go ahead.
Yeah. Thank you for the opportunity. Sir, can you throw some light on your upcoming thermal power plant and whether the CAPEX you mentioned includes that CAPEX or it's different?
In MBPL, some CAPEX is included next year in MBPL. In MPPGCL, one 660 MW, we are right now not included. That is why that INR 1,000 crore number may vary subject to the progress of the project. In both the projects, we are in touch with the state governments, and here, land acquisition is also going on in MBPL. In MPPGCL, our final PMC, NTPC, we are fixing as a PMC consultant in both the cases. But in MPPGCL, it has progressed a little less. But MBPL, the progress is going on subject to that violation of the contract in a year time. Then once they start, then the CAPEX may vary in the next two-three years.
Okay. So total around 4,000 megawatt of capacity is going to come?
Sir, 4,000, we are not. MBPL also, first phase, it is only 2 into 800 MW, 1,600 MW only.
Okay. Got it. Thank you.
Thank you.
Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
So thank you all for your questions and answers from our side. We thank all, and you can see the first nine months' performance. We are optimistic to achieve this, to maintain the double-digit growth in production and dispatches. Definitely, we are trying to though 39-40 days are left for this financial year to close, with the 10 million ton also, we are trying to make up from others to whatever extent is possible, but maintaining with almost close to 10% growth in case of production and dispatches also, 8% power plant target. For dispatches, we are ahead of the target. Similarly, overburden, almost 19% growth is there so that we are preparing for next year also. Thank you.
Okay. Thank you.
Thank you.
Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.