Coal India Limited reports 8.5% CapEx growth at Rs 4,700cr for April-July FY 2024

In a marked demonstration of robust financial health, Coal India Limited (CIL) reported a notable 8.5% year-on-year growth in its capital expenditure, reaching Rs.4,700 Crores for the period ending July FY 2024. This positive uptick is attributed to Coal India Limited‘s consistent focus on investing in key sectors like evacuation infrastructure, land, and mining machinery.

The capex utilization over this period was an impressive 100% of the progressive target, touching nearly Rs.4,754 Crores, and capturing a solid 28.3% of the annual target of Rs.16,600 Crores set for FY 2024. This growth rate is even more commendable when contextualized against the backdrop of Rs.4,332 Crores in the same period of FY 2023, a fiscal year that saw Coal India Limited’s capex skyrocket to a record high of Rs.18,619 Crores.

Coal India Limited’s aggressive expenditure strategy resonates with the central government’s directive for Central Public Sector Enterprises (CPSEs) to amplify their capital investments, stimulating economic revival. “CIL’s capex surged by a whopping 197% over three years. From Rs.6,270 Crores in FY 2020, it leaped to Rs.18,619 Crores in FY 2023,” shared a senior Coal India Limited official.

A breakdown of the capital spend for April-July 2023 reveals that land remained the dominant expenditure, accounting for 28% or Rs.1,311 Crores. This was closely trailed by the acquisition of heavy earth-moving machinery, which consumed 23% or Rs.1,083 Crores. These investments are crucial for the company as they lay the foundation for consistent production, especially when faced with challenging targets.

The emphasis on improving evacuation infrastructure is evident with Rs.664 Crores and Rs.572 Crores being allocated to the construction of rail sidings/corridors and coal handling plants/silos respectively. Highlighting the company’s forward-thinking strategy, the official pointed out, “Our production is set to surge in the upcoming years. It’s imperative to ensure that this increase aligns with seamless coal transportation, demanding hefty investments in coal evacuation infrastructure and first-mile connectivity projects.”

The budget for FY 2024 has identified major capital expenditures in areas like land acquisition (Rs. 2,907 Crores), coal handling plants/silos construction (Rs.2,174 Crores), and procurement of HEMM (Rs. 1,965 Crores), among other crucial domains.