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Blockbuster Result of the day⚡️
Eimco Elecon
#Q4FY23
Rev: 64 vs 36 Cr
EPS: 16.94 vs 3.78 YoY vs 8.48 QoQ
Forward PE : single digit!
Did you know its fortunes are linked to Coal India?
Something big is happening !!
Insider scoop on Eimco Elecon ⬇️
*If useful, please share!!
Eimco Elecon
#Q4FY23
Rev: 64 vs 36 Cr
EPS: 16.94 vs 3.78 YoY vs 8.48 QoQ
Forward PE : single digit!
Did you know its fortunes are linked to Coal India?
Something big is happening !!
Insider scoop on Eimco Elecon ⬇️
*If useful, please share!!
Business:
Eimco Elecon has a near monopoly in the underground coal mining equipment industry in India, with healthy market share backed by an extensive after-sales service network
🔸Long standing relations with Coal India (CIL) & The Singareni Collieries Company Ltd. (SCCL)
Eimco Elecon has a near monopoly in the underground coal mining equipment industry in India, with healthy market share backed by an extensive after-sales service network
🔸Long standing relations with Coal India (CIL) & The Singareni Collieries Company Ltd. (SCCL)
Background
Lets understand operations of Coal India before we get to the big trigger for #EimcoElecon??
India accounts for 12.5% of global coal consumption.
In FY22, out of 622.6 million tonnes of coal mined, nearly 96%, was opencast (OC) coal
But,There is a problem with OC🔰
Lets understand operations of Coal India before we get to the big trigger for #EimcoElecon??
India accounts for 12.5% of global coal consumption.
In FY22, out of 622.6 million tonnes of coal mined, nearly 96%, was opencast (OC) coal
But,There is a problem with OC🔰
Disadvantages of Opencast Coal
Causes
🛑Soil Erosion which leads to land degradation
🪀Discharges contaminated water, emits dust
To conclude, Not environment friendly at all!!
But do we need coal at all, isnt it being phased out by renewables??🔰
Causes
🛑Soil Erosion which leads to land degradation
🪀Discharges contaminated water, emits dust
To conclude, Not environment friendly at all!!
But do we need coal at all, isnt it being phased out by renewables??🔰
Close to 70% of the India's power generation is coal-based
Although cleaner renewable energy sources are on the rise (108.5 billion units), coal-based power generation (574.2 BU) still outweighed them by 5.3X
Coal will be phased out gradually
or
is there E-Alternative??🔰
Although cleaner renewable energy sources are on the rise (108.5 billion units), coal-based power generation (574.2 BU) still outweighed them by 5.3X
Coal will be phased out gradually
or
is there E-Alternative??🔰
UG or UnderGround Coal
It is a bit more environment friendly!!
India has huge untapped potential for UG mining, with extractable reserves beyond 300m depth
Around 70% of the country's coal reserves are amenable to UG mining, which delivers several advantages🔰
It is a bit more environment friendly!!
India has huge untapped potential for UG mining, with extractable reserves beyond 300m depth
Around 70% of the country's coal reserves are amenable to UG mining, which delivers several advantages🔰
UG coal is superior in quality compared with OpenCast and reduces the import burden for higher grades of coal
♻️UG mining is minimally invasive on land, detours land acquisition, avoids soil degradation, environmentally clean
Then why CIL isn't mining UG coal?
♻️UG mining is minimally invasive on land, detours land acquisition, avoids soil degradation, environmentally clean
Then why CIL isn't mining UG coal?
UG mining was loss-incurring due to longer gestation period, lack of skilled labour & unavailability of indigenous equipment(📞EIMCO)
The Silver Lining: several new mass production technologies (MPT) are now available that makes UG production economically viable & eco-friendly
The Silver Lining: several new mass production technologies (MPT) are now available that makes UG production economically viable & eco-friendly
If you have come so far, then you have the most important virtue to be a successful Long term Investor: PATIENCE😀
How is EimcoElecon related?
The underground coal mining segment, contributes to over 90% of #EIMCOELECON's revenue, which has been sluggish over the past decade
How is EimcoElecon related?
The underground coal mining segment, contributes to over 90% of #EIMCOELECON's revenue, which has been sluggish over the past decade
I had already indicated :
Eimco Elecon has a near monopoly in the UG COAL mining equipment industry in India
GrowthTrigger:
CIL is ramping up its UG production by 4X to 100 million tonnes (MTs) by FY 2030 from 25.6 MTs in FY'22
Long standing relationship with CIL works for EE
Eimco Elecon has a near monopoly in the UG COAL mining equipment industry in India
GrowthTrigger:
CIL is ramping up its UG production by 4X to 100 million tonnes (MTs) by FY 2030 from 25.6 MTs in FY'22
Long standing relationship with CIL works for EE
In an encouraging sign, in FY22 four UG mines of SECL and one from ECL turned profitable due to the deployment of MPT
Tenders have been floated for reviving 20 mines having mineable reserves of about 380 million tonnes
Will growing UG mining propel #EimcoElecon from UG to ✈️??
Tenders have been floated for reviving 20 mines having mineable reserves of about 380 million tonnes
Will growing UG mining propel #EimcoElecon from UG to ✈️??
This piece from ET has detailed report on UG coal mining
Source: economictimes.indiatimes.com/industry/indl-…
Source: economictimes.indiatimes.com/industry/indl-…
Disc: Holding but not a recco
I am not a SEBI registered advisor
If you found this analysis useful,
please retweet, like and follow @svinod_kumar
PS: I am a nature guy, no way endorsing more coal!!
I am not a SEBI registered advisor
If you found this analysis useful,
please retweet, like and follow @svinod_kumar
PS: I am a nature guy, no way endorsing more coal!!
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