The increase in coal prices by the world’s largest coal miner has made Coal India one hot stock. Confidence had ebbed earlier because of the government dilly-dallying on environmental clearances. The company’s board had approved a price revision of coal with effect from February 27.
NC Jha, Chairman of Coal India, in an interview on CNBC-TV18 said that he didn’t foresee any decline in volumes next year, although, the price hike is expected to impact 32% of total volumes. “We have not achieved our targeted production in FY11,” he said.
This is Coal India’s fifth price hike over a period of 10 years, with the last price hike having taken place in October 2009. On the recent spike in coal prices by the company, he said additional realisations of Rs 6,500 crore was expected on account of the price hike. Average realisations were expected to increase by 5.5% in FY12. “However, we will look at the prices post the wage structure formalization.”
Source: http://www.moneycontrol.com/
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