Coal news and updates

Inflationary pressures increase on CIL’s production costs

February 11: Inflationary pressures on the cost of production of Coal India Ltd (CIL), as measured by the All-India Consumer Price Index (AICPI) and Wholesale Price India (WPI), have gone up during the first six months of 2013-14 which is likely to impact the company’s margins, an official from the Ministry of Coal (MoC) has said.

The average AICPI and WPI increased by 10.71% and 5.74% respectively during April-September, 2013 as compared to April-September, 2012, the official said.

The average AICPI (base year 2001) stood at 232.50 in April-September, 2013 while the average WPI was 175.18, the official said, adding that the average AICPI and WPI stood at 210.00 and 165.67 respectively during the corresponding period of 2012.

Incidentally, CIL’s profit after tax (PAT) fell by 10.12% to Rs 6,783.36 crore during the first six months (April-September) of 2013-14 as compared to Rs 7,547.34 crore recorded during the corresponding period of 2012-13.

“The decline in PAT was recorded despite the company’s net sales having gone up by 2.61% to Rs 31,883.91 crore from Rs 31,073.13 crore in 2012-13,” the official added.

Many in the industry feel that this might provide a cue to CIL to increase prices in the coming days.