Coal India Case Study: Products, Subsidiaries, Financials, KPIs, and SWOT Analysis

Coal India Ltd. was founded in 1975 and became one of the world’s largest coal producers. The company currently operates in eight Indian states, 138 underground, 171 opencast, and 13 mixed mines. Today’s blog will explain CIL’s market data, financial data, balance sheet, and SWOT Analysis.  

Overview

Coal India Ltd. operates under the ownership of the Ministry of Coal (MOC), Government of India, and is headquartered in Kolkata, West Bengal, India. It is one of the largest government single coal producers across the world. 

Company Type	Public Sector Undertaking
Area served	India
Headquarters	Kolkata, West Bengal, India
Industry Type	Production and Mining

Awards and Recognitions

• 2013 – Corporate Social Responsibility Awards
• 2012 – Top 250 Global Energy Company Rankings
• 2012 – Ranked 9th on the Fortune India 500 list.
• 2020 – Best Strategic Performance Award
• 2019 – Rural Development Award

Products Offered

The products and services offered by the CIL are:

• Coking Coal:

This high-quality coal is used in coking, steel, energy, and carbon manufacturing. CIL ensures quality coal for daily and industrial purposes.

• Non-Coking coal: 

This quality of coal is not ideal for coking but can generate electricity for other industrial purposes.

• Tar: 

It is used for boilers of industrial plants, pharmaceutical industries, powerhouses, oil, dye, making roads, etc. 

Subsidiaries

Some of the company’s subsidiaries are:

Bharat Coking Coal Limited (BCCL)

This company is situated in Dhanbad, Jharkhand. It is mainly engaged in the processing and extraction of coking and non-coking coal. 

Central Coalfields Limited (CCL)

Situated in Ranchi, Jharkhand, the company offers coking and non-coking coal mining and distribution. CCL intends to grow and provide energy to the entire area. 

Western Coalfields Limited (WCL)

It is situated in Nagpur, Maharashtra. The company has expansive coal mining and processing activities across Maharashtra and Madhya Pradesh. WCL plays an important role in ensuring the fulfillment of the energy demands of these states, increasing industrial growth and developmental projects.

Eastern Coalfields Limited (ECL)

Situated in West Bengal, the company specializes in the extraction of non-coking coal. ECL supplies essential non-coking coal to various industries and power plants in these regions, enhancing the infrastructure and economic stability.

South Eastern Coalfields Limited (SECL)

This coalfield is established in Bilaspur, Chhattisgarh. The company emerges as the largest coal-producing subsidiary. SECL plays a critical role in driving economic growth by offering coal supplies across diverse sectors.

Mahanadi Coalfields Limited (MCL)

Situated in Sambalpur, Odisha, MCL is engaged in providing non-coking coal production. The company contributes substantially to meet both the state’s and the nation’s robust energy demands, energy reliability, and economic advancement.

Northern Coalfields Limited (NCL)

It is in Singrauli, Madhya Pradesh. The NCL holds a crucial position in India’s coal production landscape. The company effectively meets the growing coal needs of the region, highlighting its commitment to enhancing regional energy security and enhancing economic progress. 

Market Data

Market Cap	₹ 280,773 Cr.
TTM P/E	9.56
ROCE	71.56 %
Book Value	₹ 92.89
ROE	56.03 %
52 Week High / Low	₹ 488 / 221
Dividend Yield	5.32 %
Face Value	₹ 10.0

Financial Highlights

Income Statement

Particulars	Mar-23	Mar-22	Mar-21	Mar-20
Operating Revenue	1,38,506.22	1,09,941.45	90,233.00	96,282.75
Total Income	1,45,111.75	1,13,843.38	94,221.77	1,02,728.90
Total Expenditure	1,01,743.22	85,248.35	71,849.47	74,702.66
Profit before Tax	38,000.81	23,616.28	18,009.24	24,071.32
Consolidated Profit	28,165.19	17,358.10	12,699.89	16,714.19

The table shows significant growth in topline figures, which in turn resulted in a massive profit jump. This jump was made possible by minimising expenses during periods of good topline growth. 

Balance Sheet

Particulars	Mar-23	Mar-22	Mar-21	Mar-20
Non-Current Liabilities	80,279.44	75,083.92	70,168.14	65,090.18
Current Liabilities	68,734.64	57,208.51	50,586.90	49,068.29
Non-Current Assets	98,946.95	83,263.27	72,960.16	63,021.92
Current Assets	1,08,082.70	92,845.99	84,753.32	83,687.55

The graph above shows a healthy state of business. The current assets and noncurrent assets were funded primarily by their respective group only. 

Cash Flow Statement

Particulars	Mar-23	Mar-22	Mar-21	Mar-20
Cash From Operating Activities	35,686.21	41,106.77	10,592.42	4,977.24
Cash Flow from Investing Activities	-23,422.99	-25,714.51	181.90	1,032.84
Cash from Financing Activities	-13,661.14	-13,441.24	-8,453.14	-4,790.87
Net Cash Inflow / Outflow	-1,397.92	1,951.02	2,321.18	1,219.21

For the past few years, the investing activities have seen cash outflows, indicating the company’s strong focus on investing heavily to generate income in the long term. The operating activities also showcase consistent growth. 

Profitability Ratios 

Particulars	Mar-23	Mar-22	Mar-21	Mar-20
ROCE (%)	71.76	54.38	46.06	73.08
ROE (%)	56.03	43.63	36.99	56.99
ROA (%)	14.68	10.41	8.35	12.13
EBIT Margin (%)	23.17	18.43	16.25	18.83
Net Margin (%)	19.38	15.27	13.48	16.26

SWOT Analysis

Strengths

• Coal India Ltd. enjoys large-scale operations that affect the country’s economic growth.
• Coal India Ltd. recorded the highest-ever production and offtake in FY 2023 at 703 million tonnes and 695  million tonnes.
• The company maintains its monopoly in the market.

Weaknesses

• Coal India Ltd. comes under the operations of the Ministry of Coal. Hence, it is bound to sell coal at a lower rate to power plants.
• It is argued that the company’s operations have led to soil erosion, pollution, land degradation, and many other environmental problems.

Opportunities

• The company has plans to enhance the infrastructure of rail, solar, and thermal powerhouses.
• The company is creating opportunities to diversify into India’s energy sector.    

Threats

• Rising coal production can lead to degradation, soil erosion, and other environmental concerns.
• Any changes in the sociopolitical factor can impact the company’s operations.

Conclusion

Coal is a prominent indigenous energy source in the country. The company is one of the leading coal producers and also contributes heavily to the energy sector. The management expects the demand for steel and power to increase, thus leading to enhanced growth. 

Although the business has a proven history of generating value for its customers while maintaining significant margins, it is still recommended that you perform your research before investing. 

Frequently Asked Questions (FAQs)

1. What is Coal India Ltd’s primary business?

Ans. It is an Indian-Based mining company that operates through its subsidiaries in 83 mining areas spread over eight states across India. 

2. What are the products of CIL?

Ans. The products offered are given as follows:

• Cil Coke / LTC Coke.
• Coal Fines/ Coke Fines.
• Tar/ Heavy Oil/ Light Oil/ Soft Pitch.
• Coking Coal.
• Semi coking coal.
• Non-Coking Coal.
• Beneficiated coal.

3. What are the risks faced by Coal India?

Ans. The company faces environmental and political risks due to its nature of business and affiliation with the central government. 

4. What is the market cap of CIL (Coal India Ltd.)?

Ans. As of 12th April 2024, the market capitalization is ₹ 280,773 Cr. 

5. Where is the headquarters of CIL (Coal India Ltd.)?

Ans. The headquarters of CIL is situated in Kolkata, West Bengal, India. 

Disclaimer: The securities, funds, and strategies mentioned in this blog are purely for informational purposes and are not recommendations.