Coal India Limited (NSE:COALINDIA)

Q4 20/21

← View all transcripts

Jun 17, 2021

Ladies and gentlemen, good day, and welcome to the Coal India Limited Q4 FY 'twenty one Results Conference Call hosted by ICICI Securities Limited. 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 100 on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to mister Sameer Goyal from ICICI Securities Limited. Thank you, and over to you, sir. Yeah. Good evening, all. Thank you for joining this important call. We are very pleased and honored to host mister Pramod Agarwal, the chairman and managing director of Core India Limited, for an investor call post the q four FY twenty twenty one results and also to discuss his views on the recovery of coal demand in India. Along with him, we have Mr. Sanjeev Soni, Director Finance Mr. S. N. Tiwari, Director Marketing mister Vishwanathan, the company secretary, and other head of departments as well. On behalf of ICICI Securities, I thank you all for joining this call. Over to you, sir, for initial remarks, and then we can have a q and a. Thank you, sir. Good evening, friends. I'm really pleased to interact with you after declaring the fourth since the year 2021 results. This was a tough year. Tough because we are operating in an open area, which is gets infected by this disease very easily, and this reduced the demand in the market. This affected the our manpower very severely. And to move about was difficult. But then we could continue our production. We couldn't continue the dispatches. The dispatches were not much less than the last year nor was the production. Production was less bad less than 1%, and dispatches was less than but slightly more than 1%. In month of March, suddenly, the demand reduced, and the whatever we were expecting that the dispatchers will improve in January, February, March, it did not occur. All the power plants were running very high in the stock, so they started reducing the the stock. So that affected our dispatcher. However, in the with New Year, new hopes have risen. And up till May, June, the dispatchers have been very good. Our production also have been quite good. All the details have been posted in our website. So I would rather stop here and take the questions rather than getting into the details. If you need some details, perhaps we can I can address that during my in any of the answers? So, Tami, can we take a take the questions? Thank you very much. Sure, America. We can open for the Q and A. 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 the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets 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 Amit Dixit from Middlewise. Please go ahead. Yeah. Thanks for taking my questions, and congratulations for a very good set of numbers. I have two questions. The first one is on your production or sales target for this year? If you can provide it subsidiary wise, that would be great. Sorry, gentlemen, sir Dixit. Sir, there's a disturbance coming from your line. Request you to mute your line while the management answers your question. Okay. Sure. See, Sandeep, for 2022, we have kept a very ambitious target. Assuming that there will be a quite a good growth in this economy, and so the demand for coal will rise tremendously. At the time we were fixing the target, we never thought back in April, May, and June, there will be corona two or maybe corona three will will hit this country later part of the year. So we have discounted that, and we had assumed that the power demand will be more than demand of coal in for power itself will be more than 620. So keeping some and thinking that some of the most import substitution would take this, we kept the target for the price of $7.40 and $7.10. 7 4 $7.40 and production target at 660 06/1970. So this was our this. And if you see subsidiary wise, then the yearly target that's for production was ECL 52,000,000 ton, BCCL 52, CCL 74, MCL 19, WCL 60, FCL one seventy two, and MCL six six one sixty three. And the dispatch target for the year was ECL 56, BCCL 32, ECL 80, ECL one twenty six, WCL seven point WCL 67, ECL one ninety six, and ECL one eighty two. I would say these are very ambitious target and keeping in the mind that the last three months have not we have suffered a lot. So perhaps this will be difficult target. We will have to revise this target as the months go by. No problem. So the second question is on receivables. Right? You think it will have declined compared to maybe Jan, February, '11. Still, it remains pretty high. So what what will be the target for FY twenty two? What kind of receivable can we expect by March '22? Target for I've mentioned the target for dispatch is $7.40. Our receivables have reduced to 17,000. So I am targeting that if everything goes well, then it will come below 12 to 13,000 rupees. Okay, sir. That's great. Thank you, and all the best. Thank you. The next question is from the line of Pinakin Parekh from JPMorgan. Please go ahead. Yeah. Thank you very much, sir. So my first question is on the wage cost for this quarter. And what is the outlook for the year? Because there is also talk about the discussions on the wage agreement starting sometime this year. So how should we look at the wage cost for the year FY 'twenty two on an absolute basis? See, in the last quarter, the wage cost must have reduced by about 2%. I don't remember about the quarter as such. But for the whole year, the wage cost has reduced by 2% or 2.3 2.5% in that way. This year, there is other there's a there there will be there's negotiation, but then, again, I think we have calculated that the reduction in manpower will again be in the range of 13,000 to 14,000. And if we keep that in mind, then had there been no wage negotiation, there would have been a reduction of about 3% in the wage cost. But since there will be negotiation and it will be difficult for me to say what will be the growth in the wages, but even if it is five to 7% because keeping in mind that in last the increase of 15% and that was only five year. And in this five year, inflation has remained almost constant, the growth in the country per se has not been very high. So I think that there will be a very high in this rise in the manpower cost. There are very high fees in the wage cost, but it will be difficult for me, as I mentioned earlier also, to mention anything right now. But at the end of the year, even if the wage for that increase is taken in account, maybe at the most two to 3% rise in this cost to take. So I'm just trying to understand that because in the quarter, the wage cost was up around 14% on a q on q basis. So was it just related to any actual assumptions? There there is one actual assumption in the sir. This is the is the conference operator. Mister Parekh, there's a disturbance coming from your line. Request you to mute your phone. Okay. There has been an increase in gratuity by a thousand crore rupees suddenly. I'm unable to understand why this actuarial thing has come, but because of that only wage cost has increased or decreased. Otherwise, you could decrease in the cost was in the range of 3%. But if there is an increase of 14%, that I can't comment right now. I'd love to check that. Sure. So my second question relates to just slightly medium term. Diesel prices have been surging, which means that there is cost pressure for the company. There will be higher wage cost even if you assume a five to 7% increase, that's roughly $2.02 and a half thousand crores more. E auction coal prices are still not breaking out. The company has an aggressive CapEx program. Receivables are not being paid fully to the extent we expected it to. In that context context, sir, does the is the company looking at raising coal prices, especially for the power sector? Because there is a relentless cost surge on one side, and there is also an issue of receivables not being paid even as the company is doing CapEx. So how can the company look to, you know, increase profitability from here? See, this is the right time to increase the cost, and we are thinking very seriously about it. Unfortunately, for the last three months, when we were discussing this, this COVID thing was there. So we are discussing it very seriously, and perhaps we should take some decision soon. But then to say that when we will take this will be difficult. Understood. And, sir, lastly, what is the CapEx outlook for FY '22? And at this point of time, if the receivables is not paid down, would it be fair to assume that the company would effectively look to borrow to basically fund the CapEx and maintain the dividend payouts? I don't think that situation will arise because the sales are constantly decreasing. If you compare it with December last, I mean, December 21 December 20, at that time, our net result was in the range of $2,122,000 rupees. Now it has come down to 17,000. If everything goes well, then perhaps it will further reduce by $45,000 rupees. In April, we really tried very hard to reduce the receivables by controlling and regulating the supplies. Even now, we are trying to regulate the supplies to to certain big big debt creditors. So that is the issue. So I think we will be able to generate lot adequate profit and adequate cash to meet our demand. That's why I'm quite sure that that will not be any problem. Thank you very much, sir. Thank you. The next question is from the line of Shikharaman from Spark Capital. Please go ahead. Hello. Hi. Yeah. This is. Yeah. Thank you, sir. Sir, what is strict of coal sales in FY '21 sector wise, power specifically, both from linkage sales and e auction sales? See, I don't remember that the figure correctly, but the power consumption sales to power sector is in the range of 75 to 80%. It's maybe roughly 75%. And to ease e auction, the complete things that have been your request is in the range of 11%. And rest of the thing has gone to different small sectors. But, sir, that data, if you want, we can send you. Okay. Okay. Just a minute. Mhmm. E auction, sir, maybe. E auction was a another listing on account of the auction, although we did auction off hundred and 24,000,000 ton, as you know. But about 64 or 65,000,000 tons were lifted. Rest of the thing will get lifted in this year. So about out of five seventy six, about 11 to 12% was on the We are giving them 1.39. So am I clear to that, Hector? No. Can you just repeat this one? It's, like, not completely. It's it's from e auction account, the total lifting was 65,000,000 tons. 65 or 66,000,000 tons. So it will be on the booking booking was hundred and 24,000,000 tons. The rest of the thing will get lifted this year along with whatever is booked this year because that is the time given to them to lift the whole. So that that comes to about 11 to 12% of the total lifting, and about 75 to 80% went to powerhouses. That's two major figures I can give. That's all the thing was to small consumers, cement or gyro or something else. Okay. Okay. So what is the e auction volumes expected in FY twenty two? We are targeting for something like 30 to 40,000,000 ton. Last year, we did 24,000,000 ton. The growth in April and May and June has been quite good, but then that does not indicate the trend in the whole year because our up till May, June last year were very bad. So but then we are targeting for something more than seven thirty, 30 five million times. One thirty, 30 five. Okay. So what is the average premiums of e auction sales at present, and the and what is the likely thing for the entire FY '22? What will be likely thing? It will be very difficult, but then at present, we are getting 15 to 17% premium. And if our supplies remain good, then the premium will be about 20 to 25%. But it will be very difficult for me to predict anything. Okay. It depends on supply. It it depends if the my time increases, the premium reduces. And how the demand pans out in the coming month, one doesn't know. Mhmm. Because I was expecting that in June, there will be huge demand, but unfortunately, because of the rain not unfortunately, but because of rain and because of COVID lockdown, etcetera, the demand was not as high as I was expecting. Okay. Okay. Okay. So on the wage hike part, that part that you told earlier, what is the when is the wage hike due and expect? The the wage review was from July 1, and we have made a committee for the wage division, etcetera. Means the wage division, but it will take a while before the thing that the negotiation gets finalized. Okay. Okay. Okay. And just what was the total overburden removal And how did it compare with FY '20, and what is expected in FY '22? See, the total OB removal, we counted in terms of 2,000,000 cubic meter. So the growth was fifteen seven. The last year, it was about 1,300 thirteen forty seven in f y twenty. Twenty? Twenty? Come on. Thirty fifty seven in 2021, and it was eleven fifty four in f y twenty. Come again. Sorry. K. Thirteen forty seven million cubic meter in f y twenty one and 11/1950 in f y twenty. So the growth has been about 17%. Okay. Okay. And for going forward, f y twenty two, what is the difference? The target is taken into account, then the tar this will be about 1,538 cubic million cubic meter. But if the target is adjusted, it will go down. Okay. Okay. Okay. So when will the price of linkage call be increased again, and by how much do you expect? It's a very difficult question. I can't say on this, how much it will be increased and how when it will be actually done and how much it will be increased. That is not something I can tell you right now. Okay. Okay. Okay. K. And what is the man the split of manpower percentage between underground mines and open cast? Underground is about 53%, and over open cast is about 57%. Okay. And that proportion would request me to find the queue for follow-up. Yeah. Sure. Okay. Yeah. Yeah. Sure. Sure. Thank you. Ladies and gentlemen, please limit your questions to two per participant. Should you have a follow-up question, would request you to rejoin the queue. The next question is from the line of Vishal Chandal from DEM Capital. Please go ahead. Mister Vishal Chandra, your line is unmuted. Please go ahead with your question. The line for the current participant is disconnected, so we move on to the next question. The next question is from the line of Rahul Jain from Systematics. Please go ahead. Yes. Good evening. Thanks for taking my question. So see, first of all, I wanna check on the overburden provision. We have increased it for almost 62,000 crores, and we have hardly any cash to support that. So is there any proposal to reverse that and to and how much tax liability do we approve if we do that? I think that's your question. Please repeat because the Mister James, sir, there's a disturbance coming from your line, sir. Request you to mute your phone after your question. Oh, please repeat your yeah. No. My question is that we have this OBR provision of 62,000 crores, and we have hardly any cash to support that provision. So do we anticipate, you know, sort of a reversal of that? And what is the tax liability would be approved if we do that? And secondly, sir, the MMDR Act amendment, what is the increase in cost do we see on some kind of premium? For example, for iron ore, the premium is 150% of royalty. Is there a similar proposal on coal? Yeah. I just want these two questions. Thanks. Okay. Well, sir, I will take the second question first because in we have not acquired the land or lease under MMDR Act. We acquired the land under CBA. And so whatever land we get, that's vested in Coal India. And because of that, there is a no lease. And the royalties linked to the price of the coal that is about 15%, and there is no no no talk or any issue on increasing this royalty or anything. So that is something different from how we deal with the iron ore. And now coming to your first question, there is about 48,000 for the provision for overburden. I hope that over the years, maybe next week, not right now, but when the products our mines will start get deplete start getting depleted, then only this issue will come. We already have more than 20,000 more than twenty, twenty five thousand in our the city, which is equivalent to cash. And over the years, this will again build up. So I don't think there will be much of problem on this. Right. Right. Right. And, sir, also on CapEx budget, so what sort of number we have planned for this year, and how much money are we going to allocate for our diverse diversification projects which we have in this house, whatever the smelter and solar chips and things like that? See, solar chip, etcetera, I don't think there's any expenditure this year on it. I mean, our total expenditure on those all projects will be very less because we are looking for PPA partners. We will not be owning this company completely. So only expenditure we will incur will be in constructing this solar power power station of which we have got hundred megawatts allocated in Rajasthan and in Gujarat. So in that, on solar power, etcetera, maybe there will be capital expenditure if we take $70.70 30 ratio of that that equity. So even if we get another hundred megawatt from the 200 or 300 megawatt, we get good this year. So that will be something in the range of 1,500 crores to about 500 crores. Mostly, expenditure of 1,700 crores will be in three, four things. One is acquiring land. Secondly, r and r thing. Third thing is first mile connectivity for the three h p's and bunkers, etcetera, which we have taken to so so that we can evacuate coal easily. And the fourth thing will be railway line and sidings, etcetera. So mainly, our expenditure will be related to coal projects only where we are planning to create capacity to evacuate more coal in a environmental friendly manner. So will we exceed last year's number of 10,500 crores or some impact range? I I told him this last year, our expenditure was 13,000 crores. This year, we are planning to we are targeted for 17,000 crore. I mean Because all these FMC for the first mile connectivity project that we had planned after 35 project, All were tendered out. Two days could not sign that agreement because they could not submit their BGE, so we had to do the retender. And all these projects, if COVID situation do not aggravate, then they will be in full swing. So there will be expenditure in those projects. Okay, sir. That was very helpful. Thank you so much. Thank you. The next question is from the line of Amit Kumar from State Bank of India. Please go ahead. Yeah. Good evening, sir. Good evening. Yeah. Sir, can you please tell us what will be the working capital requirement for FY '20 '2 if possible subsidiary wise? We want to ascertain finance cost for FY twenty two. See, we have got loan of about thousand or 1,500 crores from BCCL. So the subsidiaries have got adequate cash to meet all the requirements. So I don't think we and BCCL also is now in repaying mode. Another four, five months perhaps, if everything goes well, then they will repay the loan. So I don't think there is any requirement of working capital to raise loan on this account. Okay. In FY '22, there will be no working capital requirement incremental working capital requirement. Not incremental, there is there there will be hardly any loan. You will not be taking any loan on this account. Oh, okay. One more question, sir. Actually, two more questions. Sir, you have informed that 75% of coal supply is towards power plants. Does ESG concern of power plants may impact coal demand in in 10? Any assessment on it? I won't say that we have done an an any much of assessment. We have there have got some studies done, but the fact remains that as power will remain a dominant energy supplier I mean, sorry. Coal will remain as a dominant energy supplier in coming decade or so. Maybe the role of the coal in terms of percentage will reduce, but in overall terms, in water terms, energy terms, it will increase. So I don't foresee much of problem in this. But then as as it's happening all over the world, that renewables are there since smashing some space from the conventional power, that will happen in the country as well. Okay, sir. One more question, sir. Sir, we have seen off late that private players are being encouraged in coal mining to improve output. Can it impact CIL in a negative fashion or something? The thing is, see, whatever mine has been up until now for private sector for this formation of mining. Yes, sir. That at the most most that can produce 50,000,000 tons. And secondly, those mines have got adverse shipping issue, etcetera. Thirdly, we have think they will take another three to four years to start production. By that time, Coal India is likely to become more sleek and more efficient. So I don't think it is going to affect us much. It cannot rather, it will affect us positively in a positive manner because because of the two things. First thing, we will we will we will try to become much more efficient because that will be the fundamental competition in the market. And second thing, perhaps the price will become more free, and Polynda will get some advantage out of that. Okay. Okay. Thank you, mister Agawal. Thank you. Yeah. Yes. Continue. Yes, sir. Tell me. Hello? Yes. Yes, sir. Yeah. Continue. The next question is from the line of Rakesh Vyas from HDFC Mutual Fund. Please go ahead. Yeah. Hi, sir. Good afternoon to everyone. So a few questions from my side. First, can you highlight on the underground mine closure as to how much was done? What is the target for '22 and beyond? And if you can also highlight any incremental savings from those that you can accrue? Rakesh, last year, we have said that we have identified 23 mines and which were to be closed in this year. We have already closed down 13 mines. 14 are in pipe four are more in pipeline in the sense out of that 23, four are in pipeline. Then we get closed because the closing does not we cannot do it suddenly. It takes a while because technical thing has to be done. The rest of the five or six mines that are left, they have planned to increase the production substantially. Like, it's three or four miles in ECL. They are trying to merge those two four miles into two miles and increase the production from current level of less than hundred tons per day to something like 2,000 tons per per day. And I have given them time till December. If they increase the production, that's okay. Otherwise, they will start closing down because they are deploying some modern method to increase the production. Those mines and ECLR mines, if they increase the production, then Parex took I had given them option. Either you close down or increase the productivity of the mine, so they are working on that. Another mine is Rani Atari in SCL. They're they are deploying continuous miner, and it wants the continuous mine and they awarded the tender. If the continuous miners through the private operator becomes functional, then perhaps we can get more than 1,500 in the range of 12 to 1,500 a trip ton of the course so that will also become profitable. So we have closed on those 11 thirteen plus four months. Seventeen months have been closed. So thirteen months have been closed and four. To say how much saving has been done, we are working the numbers and best figures, but then what our that's really I mean, sir, that calculation filled without getting into details, you know, 300 to 400 rupees will be paid out of those 39 out of 39. But then that's and that figure will come in a while. Is there any target that you can highlight for next one or two years? Well, this see, to this target for two to three more than one year will be difficult, but this year, again, we are working on that. Right now, we have not identified pinpointed the mines, but we have identified 17 mines, which may be closed. But I I will not say that we I have consulted my PMDs, etcetera, because some consultations and some discussion has to take place, so we are not finalized. Maybe by next next meeting, we will finalize that, and we'll give you the number. Great, sir. Sir, second question is on the MDO economics. So, essentially, you are targeting large mines to be given through MDO. So if you can just also highlight what is the kind of differential in cost that could come up because of this transformative agenda that you have taken compared to if you were to do on your own? See, Hamdioc, we have awarded two mines. One is Kotri Patanpur and another is Syarmal. Kotri Patanpur is for 10,000,000 to 5,000,000. Is 40,000,000 ton miles. So the cost that we are getting there is about 290 rupees. And rehabilitation cost will be on us. So the first thing will be the production that will be ensured in a very manner because if we deploy the labor ourselves, then it becomes it will become very costly. Our labor is very costly. If we work through the the outsource model in which contractors deploy the labors and machines, they tend to deploy very small machineries and which do not give good production, and those are not efficient. So when the end user is given for longer term, we expect that they will deploy good big machineries, which will be more efficient. It will be less harmful to the environment. And secondly, there will be continuous supply, and they'll work in much more efficient way. So the cost will reduce substantially to us as well. Secondly, in some areas, we are looking at a new model in which perhaps we are targeting that we we will not give providing the the service to the land overseas. Instead of that, we will give them upfront compensation. So that will that should reduce the cost. The maximum advantage would be by increasing the production in all these big mines, we will be able to close down the small mines which have become highly inefficient, and that will save us lot of money. And to calculate what is that will be difficult for me to write to right now. Sure. Sir, another question is related to this proposal of merging all kind of e auctions into a single e auction window. So any thoughts around that? Where do we think this would actually pan out? When it will because I need the permission of the government because this model was decided by the cabinet. We have sent the proposal that all the e auctions should be merged, and there should be only one e auction mechanism. This helps us in getting through. And first thing is it improves the transparency. Today, it is at the decision of the officers that this this mine is allotted for a particular purpose purpose. That second mine is allotted for a different purpose, and they reduce the quantity for one purpose. They reduce the quantity for another purpose. So all this leads to lack of opaque type of function. So that opacity will completely go and transparency will come. And then when there is some lack of transparency, so there are acquisitions, etcetera, so that will also be over. So that is from administrative or governance point of view, that is one of the most important things. Secondly, if a consolidated amount quantity is offered for every purpose by mixing all the modes, then I we think that the premium will be much higher than what we are getting. So that will help us. But if you think how much premium will increase, it is very difficult to predict right now. But it will definitely improve the efficiency of auction process, and it will improve the transparency of the auction process. Got it, sir. One last very quick point. Although your targets initially seems very, very ambitious, but the current run rate does suggest close to $660,000,000 ton of offtake run rate. So is it is it something that is easily achievable in your view, or you think that more than 12% growth is difficult in current environment? See, if you talk about dispatch, perhaps six sixty since purchase, noble this year or maybe it's more than plus six fifty. But it will depend how does the situation in the country is there because nobody knows even the third wave will hit. If it does not hit, then till March, we will reach six fifty. But if it hits in December or something, then everything will stop you until we because last year also, I was thinking there will be substantial increase, and we planned for that. We've tried everything, but everything was brought to zero because of this thing. So if everything goes well, then $6.60 seems quite achievable. Till now, in January, April, May, June, we have got advantage of about 15 dispatch increase of about 36,000,000 ton. And if we continue with this they and then if we take into account that this the same growth will not be there in the coming month, but if we take we assume that at least a slight increase in the coming two, three months will be there. So we'll start the third quarter with with the advantage of about 45 or 50,000,000 tons. So achieving a 60,000,000 growth will a sixty to seventy million growth will not be should not be difficult. But then Got it. Got it. Thank you so much. I'll get back in queue, sir. Thank you. The next question is from the line of Vinit Malu from Vedula's and Life Insurance. Please go ahead. Yeah. Thank you. It's Vidla Sun Life Mutual Fund. Good evening, sir. Sir, just trying to know one, we made an investment of roughly 3,500 crores. So what is this regarding? That is question number one. 30 five crore in what? 3,500 crore in appears as an investment in under current asset. That is I mean, the because in mutual fund, they have invested in some debt mutual fund. This time, one of the subsidiaries and investors, so that is the debt debt mutual fund. Nothing I mean, it's not in anything else. Okay. Oh, okay. Okay. Sir, I thought you mentioned your CapEx was 13,000 crores this year. What I can see in cash flow is only 10,800 crores. So I thought you were also counting this investment. See, the our total, this is about 13,000 crores. We have invested something in HURL and PSL. And whatever loan they take, that that is that that no. Do not get reflected in our book. But since that has been raised because of that, so we found that in investment for our own purpose. So that is there. And this rail lines debt is that gets reflected and all. So that's mainly because of that. Some tax adjustments because 7 to 800 rupees is because of GST adjustment also that we have tried to capitalize this year. Okay. Understood. And and, sir, when you said you will invest 17,000 crores in this in current financial year, out of that, how much again will be by those two entities and how much will be under us, which will get reflected here? Those entity, I think it will be about 2 to $3.53 like, 3,000 or 3,000 proceeds at those three two entities. 3 to 4,000 total, but depends on how that progress on those projects go. But then, actually, RN is in final stage, so that will be about yeah. It will be about 3 to 4,000 rupees. Okay. Okay. Understood. Sir, that's why I do understand. So with this overall CapEx of 17,000 crores, right, and I understand that we will get some substantial chunk of receivables back this year or hopefully. So we should have some, you know, sufficient cash flow for CapEx as well as dividend for this year. I'm just concerned this CapEx rate is unsustainable, you know, without cutting dividends going forward unless we either cut dividends or we, you know, belong to borrowing. So what is your thought on, you know, beyond current potential year? I mean and what and how do you see this CapEx strategy evolving? I don't want exact numbers, but a bolt on direction movement should help us. See, the type of growth in CapEx that has happened in last in last year or that is, happened this year, this this cannot be sustained. That and there will not be any requirement either. What we have we are investing what we have done in last year or this year is basically replacing all the old machineries which have not been replaced for last thirty, thirty five years. Some of the this draglines of MCL that brought thirty two years back. There was no tender. We have done that tender this year. We had not inducted the shovels and the dumpers, which we have finalized this year, so they will come this year and next year. Then as of the evacuation projects were not taken up seriously that we have done this year so that in coming years, the evacuation can happen. And now it will depend what is the demand that we face this year and what is the likely demand next year. If the demand increases, our CapEx may increase. If the demand does not increase, then as we're acquiring the land, acquiring the increasing the machineries or increasing increasing investment on rail lines, etcetera, will get reduced. So the second thing that we have done is we have gone for m b o mode. So that type of CapEx which we do for acquiring machines, etcetera, or for servicing FMC now, those things will be done by as an MDO operator, and it will be on that account. So if we successfully do the tendering of eight to nine more mines this year, large mines, then the demand for CapEx will also get reduced in coming years. So that's two things. First thing is the CapEx will completely depend on what is the demand that we get in the market. And second, how successful we are in getting the MDO operator on board. So just to clarify, for incremental production, the CapEx that we will require beyond parent financial year will be on land and probably evacuation infrastructure. Machinery, etcetera, will be taken care through MBO. This is our intention as of now. Is that a fair understanding? Yeah. That's right. And then acquiring the land will also depend what is the demand. If suppose the demand does not increase that much, then we'll not acquire the land. Sure. Right. Yeah. Thank you so much for my question. These are my questions. Thank you. Thank you. The next question is from the line of Sonal Kohli from Bowhead Investment Advisors. Please go ahead. Thank you for this opportunity. Have three quick questions. Firstly, you know, as far as the CapEx, you know, beyond 02/2022 or 02/2023, in a normalized environment, would it be fair to say it would be less than 10 coming growth? Some broad numbers, if you could give, you know, from a two, three year perspective, you know, for for the core part of the business. And secondly, the aluminum part of the business, is there a CapEx number you have in mind? FY '23, it has likely been due slightly because all the orders that we have placed will get 55 in FY '22, '20 '3 also. And most of our disrepancy project and the related sidings and railway lines, etcetera, will get completed. So FY '23 till FY '23, I think there will be some, mean, some increase in CapEx. Maybe next year, we get a target of $1,718,000 rupees and thereafter, 20,000. Thereafter, Paracetu started using. But, again, if if the demand is there and we are able to go go for something like 800 or 900, then the CapEx will have to be increased. Mister, if I heard you correctly, you know, to you mean something like 2,024, you are saying the CapEx could be $1,520,000 crores? Or did you mean how much phone number? Some some sense would you know, on that number beyond 2023? FY '23, I said, it will be in the same range, but after FY '23, FY '24, it will be very difficult for me to project because it will depend on the demand. If the demand is good, then perhaps that's there's an increase. If the demand is not there, then and then if the demand continues in the range of 650, seven hundred, then there will not be much of CapEx. So can you say not much would you would you have any number in mind in that kind of scenario? What is it, like, 5,000 crores or it is $5,010,000 crores? Not 17. 5 thousand crores. It will be in the range of $1,517,000 crores. Because land will have to be continuous. Hello? Land will have to be continuously acquired and some CapEx will be required for everything because machinery, etcetera, have to be continuously replaced. So it will be in the range of 15 to 17,000, I mean. Mine development charges, etcetera. Mine development funds, etcetera, are required. And, sir, what would be a dividend policy going forward? We gave 15 rupee dividend this year. Would that be maintained for the three going forward? And, you know, how will you fund it, you know, with this kind of CapEx? Would you be able to make enough, you know, cash flows? See, the thing is, see, the type of money we make if our production increases slightly is very high. Had the dispatch win in the end of June for my 600,000,000 ton, then my profitability would increase by another 3,000 or 4,000 pro 3,000 pro fees. So that type of money is made. So what I am assuming that every year, we will be increasing our dispatch by 40 to 50,000,000 tons. If we increase our dispatch by 42,000,000 tons, this will generate enough resources for both dividend as well as CapEx. So since you're saying, given in a normal year, beyond once your base is normal, you know, to a normal industry activity, even beyond that, on next two years, you can expect, you know, your demand to grow by 40 to 50 per ton beyond the, you know, inspection period? Then also you expect that kind of increase? I expect that if the normal year is there, this sudden increase will be about 70 to 80,000,000 tons. And there are in first year first year of first normal year, and thereafter, it will definitely increase by 40 to 50,000,000 tons every year. And if that type of dispatch is there, that will be a different resources for everything, both for this this investment and dividend. And sir, this high growth I would request you to rejoin the queue for follow-up questions, sir. Okay. Thank you. Thank you. The next question is from the line of Nitish Mangal from Jefferies. Please go ahead. Hi. Good evening, sir. Thank you for taking my question. First question, can you share what's the latest one contingent liabilities related to mining and taxes, please? Please repeat your question. I couldn't get you. Sir, could you share details on what is the latest one? Contingent liability is related to there was some mining related and tax related issues. There are three types of mainly contingent liability. One is land related. One is land related that is specific to Jharkhand state, and that too, again, mainly to Sisal area. We have acquired land, and we have acquired land from and so from the as per the record of the Harkon State Government, and we have paid their compensation to the the land owners. But in fact, there is some discrepancy in Harkon Land Record where it is shown as government land also. So those also have raised some claims. Secondly, there are there is lot of land in Sicil area which we have declared as full area of land. We have but we have not position taken position to that land. For that also, they are asking for money. So we are saying that as as soon as we get the position, we will give you the the that payment should be linked to position. So I don't think there is any problem regard to this because this has been discussed many times last year and lot of solution had I mean, certain to some extent, the solution has been beat. So this this will not create a problem. Second thing is related to the violation of environmental violations because of which in Jharkhand and in Chhattisgarh. A panel there's some penalty or thing has been imposed by the state governments in the range of 40,000 crore. And that too, again, I don't foresee any problem in because that state has been granted, and that case is not related to coal. That case was under which this has been done was related to iron ore. And as I was mentioning, that the way we acquired the land and the way the rest of the mining people acquired the land is completely different. So this is this has been challenged and that that is a state, so I don't foresee any problem on that account again. In income tax, there is some lag liabilities have been created. We have which we have disputed in various schools, but against that, some amount has been some money has been deposited, about 12,000 crores. 14 thousand. 14 thousand crores have been deposited in the to income tax department. And in many of these cases, we have one at the appeal at the first level and second level. So at different levels, those cases are pending. I am even if most of the cases go against us, then also that deposit that we have made, I don't say say that the the most of the cases will go against us because in certain cases, they have disallowed the expenditure on overburden removal completely. Not just overburden adjustment, but overburden removal completely. That's so that expenditure has been completely disallowed. So nobody can accelerate coal unless overburden is removed. So in the most of those cases, we have one, and those cases are pending in high court. So we are likely to win. Then there is a jury disparity in the decision given in suppose NCL and SCCL. So all these things are linked challenge. So even if we lose all these cases, then it will affect the profitability. But then it will not affect the kind of cash flow because of those 14,000 crore will be adequate to meet all the liabilities. So that liability part is taken care of. Land, we are solving. Harken, most of the problems have been solved. And in case of those violation cases are easy cases, again, I'm quite sure that we will there there should not be any liability. But then till the time that things are completely off, we cannot remove delete this contingent liability. Okay. Thank you very much for that allow elaborate answer. The second question, and just going back to the CapEx intensity, maybe see the let's say the I mean, not one year, three year, but let's say we see the incremental volumes over, you know, that's a two, three years, four years period. The amount of CapEx that is going in and in addition to that, the contractual expenses, so both seem to have risen together very sharply. Why is why are we seeing such a sharp increase in both the CapEx intensity and the contractual expenses? In fact, both at the same time to us fundamentally changing in the nature of our own production that is resulting in such high intensity of these things? Coming to CapEx, I have sent you, k, we are trying to replace machinery, which are old, and we are trying to invest in places where the the the CapEx is if you see traditionally, last year, the CapEx was 6,000 crore. Before that, it was 8,000 crore. And three to four years back, it was 10,000, 12 thousand crore. CapEx has been continuously reducing. So I would say that there has been under investment. So CapEx has to increase right now because we have to improve our our evacuation mechanism. We have to improve our dispatch mechanism. We have to acquire more land. Otherwise, this company cannot grow nor can we meet the demand of the nation. The second thing that you asked about the contractual expenditures, contractual expenditure has increased by about 2 to 3,000 rupees, and that is mainly on account of overburden removal. If you see, last year, we have removed more than 17 per 17% more overburden. And overall excavation, if you see, we have grown by about 13%. So that type of increase means about 200 cubic meter increase will definitely increase the increase the requirement of a a kind of contractual requirement. So that I don't see full see see, the conditions of mines had a traffic deteriorating. Most of the mines had become vertical. In order to ensure the security and the continuous operation, we have to bring those mines to proper geometric. And if you see again, the removal this work button removal of four, five hundred four, five years, it has remained in the range of 1,111 cubic meter, whereas our production has increased from 520, five hundred 30 to 600 ton million ton. So all these things had become unsustainable. Now we have stabilized this since we have come to the level at least the whole burden is slightly more than what it is required to be done. We are preparing our minds for the future. And at the same time, we have invested in the CapEx so that all the old machinery are subtracted replaced, and we can continue our mining operation. So I don't put them into a contractual expenditure has increased on account of increased excavation, and this has in the CapEx has increased because we want more efficient evacuation process. Okay. Thank you very much. Thanks for your time. Thank you. Next question is from the line of Subhadeep Mitra from GM Financial. Please go ahead. Yes, sir. Just want to get a sense. Hello? Hello. Am I audible? No, sir. Your voice is breaking, sir. Okay. Is this better? Yes, sir. You may go ahead. Yeah. Okay. Sir, my question pertains to the non powered linkage options. If it is possible to be shared, what is the quantum of coal that got dispatched through the linkage auctions and the average utilization? It's getting lapsed with is there Hey. Hey. What what's the question? Can you repeat it? Because I couldn't get the question. Although it was clear voice was clear. Quantum of the coal that has been supplied on linkage, is that one auction? The non power linkage auctions that have happened. I think previous linkages which are now getting converted into linkage auctions. Linkage auction, we will be doing in coming months, and it will be almost equivalent to whatever the quantity that is lacking. And if the exact quantity do you have, it will be 12 I I I can't say right now, but we I'll send you the speaker. But we will ensure that whatever is linkage quantity was earlier there and what has lapsed over the last one or two years, we'll we will put that much quantity. If it would be possible for you to share those numbers for FY 2122 even if it is offline, ma'am. I'm happy. Thank you. Thank you. The next question is from the line of Ashish Kejriwal from Centrum Broking. Please go ahead. Yeah. Hi. Thanks for the opportunity. Sir, three questions. One, on this over the renewal only, last year, we exposed our members in order to get more in future. And what we have seen in the last quarter that over the end, we know that we should have the shipping issue has come down to around 1.9. Overall, average was around 2.3. So my question is going forward, that is in FY '22, do we see something like two or 2.3 times in the in the shipping ratio? See, in the last quarter, unfortunately, there was shortage of explosives all over there. Since I mean, all my subsidies, in NCL and WCL. In WCL, it's where the shortage of explosives was especially very acute. And if you see the removal of the OBR, then WCL and NCL contribute the maximum removal because the the restitution ratio is high. I think that in the coming year, we should be in the range of 2.3, two point two point two five to 2.3 only. 1.9 is not something which is sustainable. Okay. But secondly, when we are investing around 14,000 crore in the cross mile connectivity, and we are already having three projects with $13,000,000 and which has been commissioned. So is it possible to share our kind of savings on a potent basis we are getting out of it so that we can have at least, you know, what kind of payback period for this 14,000 crores? We are investing about three to 4,000 copies on transportation of the whole from phase two, siding for phase two loading point. So at least that much of money will get saved. Not that that much, but most of that money will get saved once these projects are completed. But getting into the what kind of on a person basis we are paying or we can save once all these things get commissioned? For a 10 basis, about 50 to 50 to 60 rupees per ton, but that is completely based on the calculation. I'll I can send you those. I think it will should be in the range of 40 to 50 rupee per ton. Okay. Otherwise, you know, whatever projects we have already commissioned, if we can get that share we we can share that savings also, that will be Okay. That R30,000,000. There's nothing hard because not really just shared that. We'll send you the the number. Okay. But lastly, the kind of CapEx which we are doing, like, for example, this year, we have spent around 11,000 crores. So is it possible to bifurcate into different buckets, like, you know, how much we have spent roughly online vacation or machine deals or something else? And similar thing for FY '22, what we are planning for? About one about 3,000 crores would be means I'm giving completely rough figures. I don't have exact figure right now. But roughly, the 3,000 should be in the land, 3,000 should be in machinery, about thousand crores would be for this FMC project, 7 to 800,000 7 to 800 crore rupees for FMC project. And I I I will send you the details and then mine development, etcetera. We must have invest something like thousand 500 crore. So all the so major heads are basically land and machine procurement. Yeah. So that's only we are seeing that by FY '24, if demand does not increase that much, we can save on that plan that we should cost. Otherwise, the other cost will continue to Even if demand does not increase, but if we continue with 700,000,000 type of production after '23, '20 '4 also, 07/1950, then also land will have to be acquired. I won't say that land will not have to be acquired, but expenditure on h e n n, expenditure on this personal connectivity, etcetera, will get reduced. And, sir, lastly, I know your wage negotiations are still that will be starting from. But when from when we can start making provisions of thing, whether it be second quarter onwards or from first quarter onwards only we'll make provisions? And and secondly, in case if we have to increase coal prices under SSA, that can be done only after final wage negotiations or that can be done earlier also depending on the month of that? That is not linked to wage negotiation. We will try to do it because wage negotiation will take quite some time. We'll try to do decide on this fast. I'm making provisions on basis? Well, from second quarter onwards, that's making provision. Okay. Fair enough. Thanks for all the best. Thank you. The next question is from the line of Kamlesh Bhagmal from Prabhudat Leeladhar. Please go ahead. Yeah. Thanks for the opportunity, sir. Sir, one question on the part of auctions. Sir, I'm not going to the, like, the spot auction for the power and nonpower and all that. But even if you see, like, a spot auction, sir, we are getting premiums of hardly around 29 odd percent, while the way the global prices are and the prices are. So, like, the the the requirement has not been that significant. And even if we see the amount of quantity which we have auctioned, it has been hardly around 4 to 5,000,000 in an environment when the prices are on such a high level. So what's the issue there? Why the customers are not participating in that even in the special spot auction? So we have, like, say, sold hardly around four to three to four million ton in last four to five months. And even if you see the special spot for all importers, right from October 2020, we have options hardly around. Like, say, we have been also able to allocate around 7,000,000 in debt. So on that front, like, say, I really want to know that what the issue on the part when the international coal prices are at a higher of, like, the ten years, and we are not able to sell the volumes in the auction market. And, again, we are trying to say that now they will allow the buyers or the participants to sell into the export market. And then we are and on other hand, we are not able to, let's say, get self sufficient on the domestic demand as well. First thing, let's just correct the figures. Last year maybe I have understood wrong. Year, we did auction of about 24,000,000 tons. It's not 4 to 5 million I don't know where did you get that figure from. No. No, sir. I am talking about last three to four months. Last three months, we have done something like 20 56 specifically, sir. The booking is 6,000,000 tons. The booking is over 26,000,000 tons in last two and a half months. So 26,000,000 only to the spot auctions and the space station spot auctions. I do understand that in the space of power for power, there are constraints and the sector is under the problem. So I do appreciate that their their relations would be low. But I'm accepting only to the spot e auction and especially the e auction and the last is a special spot for coal importers. I don't have right now the figure of the spot auction and the year spot auction. But then one should understand that if we last year, we did 22,000,000 tons, and that in up till to my spot option is about 3,000,000 tons, and the special spot is 5,500,000 ton. That is you are right. About 4,000,000 ton was done in April and May. And the premium that we have got on this, spot, have got 32%. Special spot, we have got 7%. We should not see special spot and spot separately because both of them are almost same and except for the fact that in Special Spot Yeah. We we have what? Now you have to see that in the last few months in up January, February, March, how much auctions we did on this account. We did last year a 24,000,000 ton out of which most of the thing happened in last six months. And those people are still to lift the lift the coal. Then secondly, during all these exclusive months, the demand got subdued because of COVID, etcetera. And in such such circumstances, to expect that people will and then the first again, the it's a it's rainy seasons were ahead. We know that in rainy season, the convention of the poll gets reduced. So people didn't bid for it. We have offered lot lot quantity. If people are there is no demand in the market, perhaps we cannot do much about this. Whatever the poll in what is taking place, we'll have to see the do the analysis why the coal import is taking place. A part of this is maximum part is out of 200,000,000 ton s o v one steel, and 50,000,000 ton is because of the steel industry coking coal, which we cannot replace. 25 to 23,000,000 ton is on account of the power plant located on the coal. We can so there's hardly much of the coal which needs to be replaced from we understand that the quality of the coal is not very good in the country. And, hence, the the the we cannot replace that that type of the code. So we can replace only the code which can which is not which is of the same quality as Indian code. And in this context, the the thermal power coal that was required by the country last year almost was substitutable, you could substitute. About and we what we calculated that was 80 to 90,000,000 tons oil has been substituted. This year, again, had there been the normal circumstances for us, our doesn't much more. See, the price of the pole means that the premium that we get in the pole pole also indicates the demand. If the demand would have been there, perhaps the premium would have been much higher. And, sir, question on this CapEx on the evacuation. So on in the presentation, we have highlighted that around 27,000 crore of investment would be made on the evacuation projects. So would it be entirely by us only, or there would be participation by the railways as well? So how much would be shared by the railways? Because even if we see the past, entire of the investments on the railways used to be done by the railway Indian Railways. So is it going to be spent entirely by us or on our on our account? See, the evacuation that we have shown is only our infrastructure. About 10 to 12,000 per rupees will be spend spent on PHP. So these are our infrastructure. They have infrastructure also. You cannot accept railways to spend on that. Then there are about twenty four and twenty one 45 lines, which are 21 is fighting and 24 are lines connect providing connectivity to our siding. So we'll have to spend on that. So I don't know whether 24,000 or whatever, but in the that range, 20 to 22,000 will have to be spent by us. It is not really project. It is a project for the evaporation of the coal, and it's basically on the Coal India's property. Okay. So so so in that sense, that this means that CapEx intensity is going to remain very high for Coal India incoming next three, four years? At least for two years, it is going to be I mean, it is going to remain in this range, sixteen, seventeen thousand. Thanks a lot, sir. Thank you. The next question is from the line of Kirtan Mehta from Bank of Baroda Capital. Please go ahead. Mister So there's a disturbance coming from the line of mister Kirtan Mehta? The next question is from the line of Rahul Jan from Systematics. Please go ahead. Yeah. Thanks for taking my question, sir. Sir, also on the if I my question earlier on the MNDR Act, sir, it is very clearly specified that, you know, PSUs will have to pay around 200% of royalty. I would invite you to the, you know, schedule six of the Quebec. So just you know, I was saying that it's not applicable to me. I'm just confused over here. Can you explain that? I don't think, ma'am. They are actually applicable much to except for certain things. We are not on the lease land. We are not operating our mines on lease land. And there is no we are already paying very high royalty. This is about 14% and plus some this no. Okay. So and all we are paying more than 18% of 18% of our selling prices royalty. And on that royalty, think 18% is GST. Plus, we are paying 400 as a GST compensation tax. I don't think there's an any further talk about imposing more royalty on Coal India or Coal, but No. I mean, see, this is but we are the other comp we are about here, let's say, and then we see and then we are now, you know, paying is a compensatory measure for private private, you know, entity which have paid high premiums for the minor acquisition. Right? So I'm just wondering how it is different for. We are completely operating and completely different. If you want, we can have offline discussion on this. Sure. Sure. Sure. So, again, this is under your assessment. When is it that when India's cold demand is likely to peak because, you know, none of your company none of your customers are expanding capacity. You know, hardly some six gigawatts of capacity was added last year, and, you know, there is a very small pipeline for thermal capacity addition for next two or three years. And in that environment, you are doing such high CapEx. So what is your, know, your blue sky assumptions, say, three, five years down the line of where, you know, our coal demand is going to peak? I think it will peak somewhere near twenty thirty, not before that. See, already our plans are operating at very low PLF. Even if that PLF is about less than 50%, even if they increase by 10 to 20%, it's quite understandable, then the coal demand will increase tremendously. And that's likely if the country has to grow the this power, and whatever power we are talking about cannot come through solar energy so far. Right. So we also plan to enter the power generation sometime in the future? Not in a big way or anything significantly. We are looking at solar power only, not beyond that. Right. Thank you. Thank you so much. Thank you. The next question is from the line of Vinit Malu from the Glass and Life Mutual Fund. Please go ahead. Yeah. Thank you. Sir, just a quick follow-up question on the CapEx part. You said there's bulk of it on machinery, which is for replacement of existing stock, which is very old and depreciated. So that how long will this portion of the CapEx will continue? How long will it take for you to modernize your fleet of machinery? We have ordered almost everything that was required. Not small thing, but almost all the big machinery that were required, almost that have been ordered, like two forty. Only thing that is left is 42 cubic meter shovel. Otherwise, the draglines, 20 cubic meter shovels, dumpers, etcetera has been placed. This will come in next one and a half year or two years. As a drug line will take a long time because they have got a a lead time quite a long lead time for the drug lines will come in next four, five years. But rest of the machinery will come in two to two years. So thereafter, perhaps, this investment should cease. Okay. Okay. Understood. Yeah. Thank you so much, sir. Thank you. The next question is from the line of Sonal Kohli from Go ahead Investment Advisors. Please go ahead. Thank you for this opportunity. Again, sir, I have two questions. Firstly, on the ESG side, have you taken any significant initiative, you know? And is there any possibility expectation of, you know, the coal plants? Is you know, how is the technology there over the next five years? Do you see any possibility of that or what could be the roadblocks, you know, or any technological changes that are happening which could help us on on that side within a time frame of five years? That's my first question. Yes. This side, can see the presentation also. Last year, we did about 800, more than 800 hectares of land. We plan planted more than 20,000,000 trees. This year, we have increased our target to 1,300 hectares, and we think that will be substantially more improvement. We are investing in FMC because of ESG also because it will reduce the environmental load. We have seen that the transportation of the coal cost cost much more pollution than the production of the coal. We are instead of using blast explosive for at scoping coal, we are going in a big way for surface minus and all new contracts we are providing that contractors will use surface minus. Then we are using what whatever water discharge that is taking place place from mines. We are using almost everything of that for dump, the stabilization, etcetera. So all those things, whatever is possible, we are doing. We are getting our, you know, minds graded so that if there is some external agencies so that if there's certain improvements can make we we are working on that. For the first time in full India, we have brought out the ESG report from prepared by some third party agency next year again. This year again, we will be preparing that. So all those possible thing on ESG we are doing in COVID situation, we have tried to help the society in the big way. And, actually, there is no other corporate entity in the country which would have established hospitals amounting to total beds of about four thousand four four thousand beds. So in the area of our operations, perhaps we were the big after the state government, we were the biggest provider of the health care during COVID situation, and they have upgraded our hospitals. We are creating the oxygen plants in about 27 hospitals so that they can if something like COVID something similar to COVID happens again in future, there will be no shortage of oxygen in those area. So all these things we are doing. For gasification, we had put this we have put this danconi on tender. We have got received we have received one that offer as well. We are doing the analysis, but everything will depend on viability. Unless there is a clear cut viability and there is a commitment from some from agencies to pay means for offtake of the product that we take, we it will be difficult for us to proceed in that line. Sir, as far as we are you know, the solar CapEx is concerned, do you expect it to come material after your, you know, CapEx of next two years, which is quite large, is over. Is that preventing you from investing heavily in solar? And would those plans change between '24 or '25? Secondly, the technology, which you are Hello. Hello. Yeah. Very high capital in the next two years. So what I wanted to know was because of that, is it that, you know, you are missing this in solar? And would that be to change beyond '23, let's say, '4 to '25, like, you would start spending much more on solar projects. You know? Secondly, the kind of machinery you are employing, which is new, what it will be once this, you know, new machinery is over, let's say, you know, we land up into 02/2024, could we expect some type of, you know, EBITDA per ton increase because of these initiatives once all of this is complete, and what could be that quantum? We're just trying to evaluate, you know, any any advantage either on manpower reduction or project increase because of this new machine. See, manpower is decreasing very rapidly. About 15,000 manpower is 14 to 15 14 roughly 13 to 14,000 manpower net reduction is there. We have decided that we will not take up for our projects in those area where the manpower engagement is very high. Like, in areas where we have to take land outstrives in larger numbers, we have stopped taking those mines. And now we are concentrating on the So manpower is going to reduce continuously, and perhaps in coming years, the manpower will reduce at a much still rapid rate. So so that is one thing. So the cost is going to reduce. The man machinery assessment will likely to go down. Whatever investment you are right, whatever investment we are making in solar projects, etcetera, will likely to give good results. So EBITDA will definitely improve from the next year onwards. There is no doubt about that since I'm it depends mostly on our the offtake. If the there is a normal year and offtake improved, even in this bad year, we had an our EBITDA of 25%. Last year, was 28%. So it has reduced only slightly. This is so much of cap I mean, everything. So EBITDA is likely to increase further if we go to 650 or something like that this year. There will be tremendous increase in profitability and EBITDA. So that is not something which will get affected by whatever investment we are making or whatever machinery investment, etcetera, we are doing. Then those impacts will be very mild very small. My question was actually on the contrary, the you know, the opposite of perhaps, you know, what may have come out of it. What I was trying to understand, because of the machinery you are spending, you know, have you done any analysis of, you know, those things being constant? What would be EBITDA per ton increase because of reduction in employee cost or, you know, increasing productivity? Any sort of, like, EBITDA per ton, which, you know, it's totally express something, but it it was until, know. You'll hear me. Why is this not clear? If you send this, I mean, somehow I'm not getting Can the moderator repeat the question? Because his voice is getting slightly bad. Hello? Hello? Sir, repeat. Let me try it again. Can you hear me? Yeah. Your voice is coming, but it's not clear. Clarity is not there. Is it is it there? No. No. I I I'll send you an email. Sorry. Thank you. Then I'll reply you all separately because there's there's nothing. Okay. Next. Thank you. The next question is from the line of Vishal Chandak from DAM Capital. Please go ahead. Yeah. Thank you very much, sir. The line got disconnected in the previous occasion. So my question was, you know, we had in the past been talking about the vision of achieving 1,000,000,000 tons of production by FY '20 '5 when we accelerated it to FY twenty four. And now you are talking about, you know, six, seven hundred million ton also probably could be a more aggressive target for next year. So when are we, you know, at all, are we planning to hit about a billion tons in and dispatch, or is this something that could be kind of hanging off fast? See, if you coal production depends on what is the demand of the economy. We cannot keep on producing the coal and storing that. So the last year, we produced about 596,000,000 tons, and still our stock increased to 99,000,000 ton or it started touching almost hundred million ton, which is the ultimate capacity we can store the coal at our this year, again, we have kept a target of 740,000,000 ton of dispatch. But as the things are happening, I I think in coming months, perhaps, we'll have to recalibrate our targets. I think that by f y twenty two, the economy will be at the same level as as it was at f y twenty. So these two years have been lost. So if we think that the country will progress in the develop in the same way as it was expected, then perhaps f y twenty four will become f y twenty six. So we are keeping those targets that perhaps we are at a slightly lower level. But to say that someday or other, things will be achieved is slightly difficult. Nobody expected COVID to happen. Nobody expected that almost the second phase will be so severe. Nobody knows that the third wave will come or not. So in that circumstances, keeping the target constant is not something right to do. No. I I completely agree, sir. So, you know, my question was largely with respect to where do you see the pockets of revival in cold demand so that we can hit a billion ton? So it's always the demand, which is the constraint, not the production capacity now. So Right. First thing is the demand of energy is likely to increase if it is a normal year. We are operating our thermal power stations at 60% or something like I mean, less than 60% PLF. These are likely to increase if the country has to develop. Secondly, in another sector, again, we can replace lot of some coal which is being imported. Last year was a difficult year, so everything where the productions were at such low and demand was low. This year, again, the likely demand scenario is going to be subdued. But in coming years, definitely, the NRS will improve. This pipe huge pressure on us during April, we kept on supplying coal to NRS. This is for the first time that we didn't we did maintain the ratio for NRS with power increased power demand also. So I think that slowly we'll win the confidence of NRS sector, and we'll be able to meet their demand. And that way, we I think our coal demand should increase. The country has to develop coal coal coal is going to remain the main source of energy in coming ten years. Correct. Sir, my second question was with respect to your CapEx. You know, we have been talking about replacing three decade old machinery, and probably by next three years time frame, we will replace everything which is possible. And as you mentioned, you'll you'll spend about roughly close to about 45,000 crores out in this entire phase over the next three years time frame. Will that be good enough to take us to, you know, to a billion tons capacity? Or, again, to reach that billion ton production, we would again have another 50,000 crores of further next round of CapEx for that? See, there are two things. 45,000 crores is not for machinery and FMC only. This is this includes land development. This includes rehabilitation of the people that it includes many more things. So first thing is there that requirement for perhaps the connectivity rail connectivity requirement for this machineries will get subdued because the two things are happening two, three things are happening. First thing, the constructions will happen. So the requirement to that extent, the requirement will get reduced. Second thing, we are moving to a new mode. So on all those new projects, etcetera, the required funds will be refer invested by the mine mine operator. Third thing, in most of the mines, slowly, our own production is getting reduced and production is improving through outsourced mode. So there's a machinery requirement that's getting replaced replaced. But at the same time, if we have to maintain some consistency in our production and con constant increase in production, at least 20 to 25% of our total production should happen in house. Otherwise, because of the figure of the contracts, because of other things, production can production will not be constant. So to that extent, we have we are maintaining our in house capacity, and rest of the thing is getting outsourced. So after this assessment, perhaps the investment on these three things will get reduced, but investment on land will be there, and and that will be a substantial investment, not in the range of 30,000, but $39,000 crore rupees of land will be required. And along with other things that we have to increase the production, then some investment will have to be made. Great. Sir, my next question was with respect to your diversification from coal. You mentioned, you know, coal to gas is one project, then fertilizers another, solar power is another. So if you could just give a brief update on where are we in the on all these projects. See, coal to fertilizer is one project of PFL. That was started about two, three years back, and the construction got hampered because of COVID. Otherwise, it should have reached to 30% level. This is now in 10 to 50. I don't remember exactly, but it must be in the range of 10 to 15%. But this government has given guaranteed of 12% IRR on this project. So and but our investment is not much because the total project is about 8 to 9,000 crore. Our total investment is likely to happen to 800 to 900 crore rupees only. The second project that we are talking about is diversification. We are looking for partner, and we are looking for somebody who can offtake over all our products. These things have not materialized, so saying anything beyond this will be difficult. When will it come? By what will happen? Unless the viability is there, unless the assured the offtake is there, we are not going to invest on this. The third thing is solar power. Solar power, we are targeting for our two to 3,000 of gigawatt investment in the coming year. We have got one project which we we have mean, on which we have to work, and we are likely to complete this in this year. And then coming years, we'll take some projects because that will solar power is one area where we think that it will give economic sustainability to the company for coming two to three decades. So that is one area in which we need to invest. Rest of the things, smelter or these things, that will depend on whether whether we can get some partner who can we are looking for a model in which we'll provide all the clearances. We'll whatever facility the government is going to extend that we will take on board. And thereafter, we'll tender it for some private 5% investment. We hope that maximum expenditure or maximum capital investment will be done by those people. And because in those sectors, that capital there is a risk of technology and which Coal India perhaps will be it will be difficult for Coal India to take. Sir, my next question was with respect to mister Chandak, sir. We have other participants waiting for the term. Thank you. Yep. Yep. Mommy Hello? Hello? Please continue. The next question is from the line of Ashwini Kumar, an individual investor. Please go ahead. Yeah. Good evening, sir. I had a question. If I look at your production data for monthly production data on slide 11 of the presentation, we see that in March, you are able to produce 70,000,000 tons. That is sometimes sometimes 75,000,000 tons, sometimes 80,000,000 tons, and maybe you have gone up to 82, 80 three million tons. Now in the previous months, either there are twenty eight days or twenty nine days depending upon the leap year or not being there. So if you are able to produce 80,000,000 tons in the month of March, what basically prevents the company in terms of either man, machine, or process or within MDO or with the company minds, company's own production? Why you are not able to scale up within the months of January, February, and March? One can understand that first half, like July, August, September is a period where there is monsoon, etcetera, or maybe the demand is low. But, certainly, in the normal years, demand in Asian economy in second half is slightly higher and gets more higher in March many a times. But if you are able to do 80,000,000 tons in March, why you are not able to produce seven 80,000,000 tons in the month of Feb or in the month of January? There is set of last mile. And the last hundred meter one was very fast. We put all the our equipments, all our resources in production of coal. If you will see that the to that extent, OB removal gets suffer. So, basically, in the last two one month, the type of resources, mobilization which we do type of first which we make is something unsustainable. And so we remove the machines from OV and start producing coal because in January, February, March, we have to produce more because in spring month, up till May, June, the demand is always very huge. And that type of sending that type of production becomes very difficult. So whatever is that we do in March is something difficult to explain. But then then I have found that it is completely unsustainable. In April, May also, the type of production we do, if we do that throughout the year, perhaps the it means there will be no demand for the pool. No. What point is, sir, in whatever conversation I'm hearing for the last one and a half hour, basically, your estimate, as even Vishal pointed out, that 1,000,000,000 tons was the earlier target. And you said these are two COVID years, '20 FY '21 and '22, '1 part of it, one first quarter of it. But if you really think about think about the industrial production moving up and, again, the demand for power, the 5,000,000,000,000 economy cannot happen without power demand going up, and that too thermal PLF improving. So if we take the normal situation here, the demand for coal has to be strong. So I agree that you can do 80 in March, but let's say lesser in previous months. But if the demand were to rise, let's say, by 12% in terms of power demand, thermal power demand, demand for coal would rise on a normalized basis. So would you make any attempt to increase production of coal? Because you have cash, you have you have man, you have machines, you have put the CapEx, the higher size machines. What is the plan to really improve the monthly output in months other than March, is there any specific attempt by the company to improve the production other than the month of March? Let's say, should the demand rise, would you be in a position to supply more, or would India will have to import again more? That is my question, sir. I'm quite sure that if the demand rise and rises, then we will be able to meet the demand very easily. First thing in the last actually, in this month of March February and March, I stopped talking about production to my offices because it was quite evident that we will end up with a hundred million tons of stock. I wasn't surprising only about the dispatch. But in April, the dispatch was improving, but, again, in May, the demand started pitching off. But then there was a demand. I won't say there demand was not there. So if the demand is there, the product producing coal is easier than evacuating coal. That's why we are in evacuation. And evacuation is this the I think we just get that materialized in '53. And we are targeting for twenty three to '20 '4. So March or April 23, we are at least most of them will get completed. Then after the evacuation will not be a problem. We have started in everything, we have started money monitoring the contract. Until that this time, we used to think that our contracts should be of the same level as the demand is. Now we are saying that the contract should be at least 1.3 times the demand likely demand is because if because there's hardly any situation in the country that the con contractors perform up to % in the very few contractors who give a % performance. So we have increased out with this capacity contractual capacity also tremendously. That two types of contractual capacity. One is removal of OB and coal, and second is transportation and crushing. At all these points, we have increased our capacity in all subsidies and almost all mines by 1.3 times. So with this, I am quite prepared to increase the production whenever the demand is. Sure. Sure. Thank you, and wish you the very best, sir. Thank you. Thank you very much. Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Mr. Rahul Modi from ICIC Securities for closing comments. Thank you, thank you, Mr. Agarwal, and thank you, Mr. Tony. Thank you, mister Tiwari, for for your time. And, again, a very detailed presentation and a very detailed call. You've given more than one and a half hours of your precious time. We'd really like to thank you for all the efforts you made, sir. Thank you, Rahul, for arranging this con call. I understand there were few questions which have remained there, and people could not get the chance to if they send the question to mister Vishwanathan, we will send them reply on email. And if they feel that there are certain questions and factual question, I don't there were one or two questions on which the data could not be given. If they send those questions, we will definitely send them to email. Thank you very much for arranging this phone call. Thank you, Rahul. Thank you. Thank you. Thank you. And on behalf of ICC Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

• Quarterly report
• Slides