*CLSA ON COAL INDIA:TP260*
Profit drop driven by sharp fall in e-auction ASPs, higher-than-expected mining and staff costs
Believe Coal India's volume growth should improve 2H onwards
Believe pressures from weak e-auction prices and rising costs could continue
See another price hike as unlikely until FY18
see high risk of Coal India cutting dividend payout, which would remove key valuation support
cut FY17-19CL EPS by 7-9% and now forecast -3% EPS Cagr over FY16-19

*MS ON COAL INDIA:TP 268*

miss was led by all-around earnings weakness; realization under FSA, e-auction below estimate
believe volume growth and e-auction realization will improve from current levels
Believe cost per ton will also decline with ramp-up in volumes
believe CIL has not been able to fully pass on impact of regulatory cost increase
Increased capex, ltd price flexibility, looming wage hike will mean muted earnings growth in F17

OUR TAKE: denofwealth was only co in India to accurately forecast Q2 nos and *estimates of all brokerages proved wrong by massive margin* Now brokerage houses are estimating ONLY 6-10% decline in FY17 EPS . Again they will prove wrong in a big way:
A. Coal offtake still not high. You may check Oct Nov despatch at Bse
B. Diesel cost likely to rise which will dent margins
C. SALARY: *In Q2 wage hike on ad-hoc basis 12% which is not final. Actual wage hike may be 18%*. It can significantly reduce profit margins in H2. Original demand of Unions 42%.

Hence *denofwealth estimates FY17 earnings to decline 20% or even higher*

CIL can decline to 272-276 in 2-3 weeks
Can be 225 in 6 months