MUMBAI (NewsRise) -- State-owned Coal India reported a better-than-expected third-quarter net income on the back of higher prices, even as concerns linger over the slowing pace of output growth at the world's largest producer of the fuel.
Coal India, which controls more than three-fourths of the country's total output, has been reporting strong profit growth over the past four quarters helped by a price hike it announced in January 2018.
The company had aimed to expand its annual output to one billion tons by 2020, but rising concerns about environmental pollution and shifting focus to renewable energy prompted the company to push that goal by another six years to 2026.
The company's profit for the quarter ended in December jumped more than 50% to 45.7 billion rupees ($645 million). Analysts were expecting a net profit of 40.69 billion rupees. Revenue grew more than 15% to 250.46 billion rupees.
"Demand outlook remains healthy given the rising power demand and low coal stocks at the power plants," CLSA said. The demand for thermal electricity grew 4.7% between April and January.
Over the past nine months, Coal India's output has been slowing, with April-October production down 10% and little growth in November-January. The miner has also been struggling to get railway rakes to transport fuel from its coal fields in spite of the surging demand for electricity in India. The nation has been contending with a shortage of rail wagons due to non-availability from private suppliers.
The weak output comes as thermal coal imports rose at the fastest pace in four years, according to media reports. The government has increased the spending on coal exploration in 2019-2020 to develop more blocks of the fuel in a bid to increase the domestic output and curb imports.
In the next fiscal year that begins in April, India plans to spend 6 billion rupees on exploration of coal and lignite.
Shares of Coal India lost 1.2% in Mumbai trading, while the benchmark S&P BSE Sensex closed 0.3% lower.
--Dhanya Ann Thoppil