Coal India reports 26% rise in profit as staff costs fall

Profit for the three months ended March rose to 86.8 billion rupees ($1 billion), according to a stock exchange filing on Thursday. Earnings beat an average estimate of 76 billion rupees compiled by Bloomberg.

India’s accelerating electricity consumption has boosted usage of the fossil fuel. The Kolkata-based miner saw its output and shipments touch new heights during the fiscal year through March and is investing record sums to augment its mining capacity and other infrastructure.

Struggling to expand other sources, the country is increasingly counting on coal for its energy security.

The trend has pleased investors.

Coal India’s stock has nearly doubled over the past year, with some brokerages setting even higher price goals.

The company, one of the country’s biggest corporate employers, incurred 135.4 billion rupees expense on staff salaries, a 20% decline from a year earlier when it boosted provisions for a wage increase following an agreement with trade unions.

Demand for the fuel remained strong during the quarter, as customers stocked up ahead of the summer season. Shipments rose nearly 8% over the year, with 90 million tons of inventory sitting at the company’s mines at the end of March.

Higher availability meant lower competition for coal and weaker premiums on open market sales, a key profit-driver for Coal India.

Average revenue per ton declined 9.5%, dragged down by shrinking e-auction premiums, according to a presentation that followed the earnings release.