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Deccan Herald
4 days ago
- Business
- Deccan Herald
India's swelling coal stockpiles test state-owned mining giant Coal India
By Rajesh Kumar SinghRecent rains may have provided the world's most populous nation some relief from scorching summer heat, but they shattered state-owned mining giant Coal India Ltd.'s hopes of denting record-high early onset of monsoon rains and frequent showers in parts of the country have kept India's electricity demand in check and coal stockpiles high. Combined with increased competition from cleaner sources of electricity, as well as other miners, Coal India is unlikely to return to the massive profit margins it enjoyed just a few years ago. 'Coal India's growth window is narrowing,' said Rupesh Sankhe, senior vice president for research at Elara capital India Pvt Ltd. 'With more and more renewable energy coming on stream, energy storage projects coming up and a renewed push for nuclear, demand for coal will increasingly be under pressure.'.The Kolkata-based miner has been sitting on an unsold inventory of more than 100 million tons since the start of the fiscal year in April. Meanwhile, coal stockpiles at power stations, the company's biggest customers, are up almost a third from a year earlier at more than 58 million tons, the highest level in records going back 17 Motor has a rare earths stockpile that can last about a year, source reduces the premiums Coal India can charge in auctions — a key driver of its earnings. In 2022, when a post-pandemic rebound in the economy led to coal shortages, customers paid premiums of more than 300 per cent above baseline prices. That margin has fallen to 43 per cent and could potentially slip to 30 per cent, Marketing Director Mukesh Choudhary said on an investor call last month. Soft demand and ample supply is weighing on the outlook. India's coal-fired generation fell 6 per cent from a year earlier in the first two months of this fiscal year. Meanwhile, peak electricity consumption this year is still more than 10 per cent short of a projection in February, and more than 5 per cent below last year's maximum. Unless heat waves this month push power use drastically higher, it would be the first annual decline in at least two decades. Meanwhile, a raft of players are mining the fuel to run their own plants as well as pushing some of their production into the market. NTPC Ltd., India's largest power producer and coal user, is seeking to almost double its own production to 50 million tons this fiscal year. The company has also sought to source more fuel from non-state companies. Those producers are grabbing an increasing portion of the nation's coal output. They mined 198 million tons in the year through March, or about a fifth of the total. That will weigh on Coal India's sales. While Sankhe expects the miner's volumes to rise as much as 5 per cent annually for the next three to four years, he forecasts a decline thereafter. The company's profit has peaked, since the increased competition will weigh on auction prices and offset the higher volumes, he said.
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Business Standard
4 days ago
- Business
- Business Standard
India's swelling coal stockpiles test state-owned mining giant CIL
Recent rains may have provided the world's most populous nation some relief from scorching summer heat, but they shattered state-owned mining giant Coal India Ltd.'s hopes of denting record-high inventories. The early onset of monsoon rains and frequent showers in parts of the country have kept India's electricity demand in check and coal stockpiles high. Combined with increased competition from cleaner sources of electricity, as well as other miners, Coal India is unlikely to return to the massive profit margins it enjoyed just a few years ago. 'Coal India's growth window is narrowing,' said Rupesh Sankhe, senior vice president for research at Elara capital India Pvt Ltd. 'With more and more renewable energy coming on stream, energy storage projects coming up and a renewed push for nuclear, demand for coal will increasingly be under pressure.' The Kolkata-based miner has been sitting on an unsold inventory of more than 100 million tons since the start of the fiscal year in April. Meanwhile, coal stockpiles at power stations, the company's biggest customers, are up almost a third from a year earlier at more than 58 million tons, the highest level in records going back 17 years. That reduces the premiums Coal India can charge in auctions — a key driver of its earnings. In 2022, when a post-pandemic rebound in the economy led to coal shortages, customers paid premiums of more than 300 per cent above baseline prices. That margin has fallen to 43 per cent and could potentially slip to 30 per cent, Marketing Director Mukesh Choudhary said on an investor call last month. Soft demand and ample supply is weighing on the outlook. India's coal-fired generation fell 6 per cent from a year earlier in the first two months of this fiscal year. Meanwhile, peak electricity consumption this year is still more than 10 per cent short of a projection in February, and more than 5 per cent below last year's maximum. Unless heat waves this month push power use drastically higher, it would be the first annual decline in at least two decades. Meanwhile, a raft of players are mining the fuel to run their own plants as well as pushing some of their production into the market. NTPC Ltd., India's largest power producer and coal user, is seeking to almost double its own production to 50 million tons this fiscal year. The company has also sought to source more fuel from non-state companies. Those producers are grabbing an increasing portion of the nation's coal output. They mined 198 million tons in the year through March, or about a fifth of the total. That will weigh on Coal India's sales. While Sankhe expects the miner's volumes to rise as much as 5 per cent annually for the next three to four years, he forecasts a decline thereafter. The company's profit has peaked, since the increased competition will weigh on auction prices and offset the higher volumes, he said.
Time of India
07-05-2025
- Business
- Time of India
Stock Market Sectors: Stock market update: Mining stocks mixed as market falls
Tired of too many ads? Remove Ads NEW DELHI: Mining stocks were trading mixed on Wednesday at 10:45AMNMDC Ltd.(up 0.91%), Coal India Ltd.(up 0.69%), Gujarat Mineral Development Corporation Ltd.(up 0.34%), Sandur Manganese & Iron Ores Ltd.(up 0.29%), MOIL Ltd.(up 0.22%), The Orissa Minerals Development Company Ltd.(up 0.21%) and Ashapura Minechem Ltd.(up 0.14%) were among the top Trimex Ltd.(down 7.05%), Lexus Granito(India)Ltd.(down 4.22%), Aro Granite Industries Ltd.(down 3.80%), Pokarna Ltd.(down 1.60%), Madhav Marbles & Granites Ltd.(down 0.98%), KIOCL Ltd.(down 0.87%) and 20 Microns Ltd.(down 0.36%) were among the top NSE Nifty50 index was trading 26.3 points down at 24353.3, while the 30-share BSE Sensex was down 92.69 points at 80548.38 at around 10: Motors Ltd.(up 3.4%), Power Grid Corporation of India Ltd.(up 1.32%), Mahindra & Mahindra Ltd.(up 0.81%), Eicher Motors Ltd.(up 0.76%), Hindalco Industries Ltd.(up 0.75%), Coal India Ltd.(up 0.71%), State Bank of India(up 0.63%), Titan Company Ltd.(up 0.57%), Bajaj Finance Ltd.(up 0.54%) and SBI Life Insurance Company Ltd.(up 0.51%) were among the top gainers in the Nifty the other hand, Asian Paints Ltd.(down 1.51%), Sun Pharmaceutical Industries Ltd.(down 1.11%), Grasim Industries Ltd.(down 1.03%), Bajaj Finserv Ltd.(down 1.0%), Nestle India Ltd.(down 0.98%), Tata Consultancy Services Ltd.(down 0.82%), IndusInd Bank Ltd.(down 0.74%), HCL Technologies Ltd.(down 0.72%), ITC Ltd.(down 0.66%) and UltraTech Cement Ltd.(down 0.6%) were trading in the red.
