UPDATE 1-Coal India Q4 net slips 5 pct, lags estimate
* Q4 net profit slips 5 pct from year earlier
* Says no decision yet on raising prices
* Coal India revenue seen rising 6-7 pct in current year (Adds details, quotes from conference)
May 28 (Reuters) - State miner Coal India, which earlier this year reversed a price increase under pressure from power producers, on Monday reported its first decline in quarterly profit since listing in 2010, weighed down by a steep increase in wage bills.
The company, which produces nearly 80 percent of the coal in India, has been under pressure for missing its scaled-down output target for the fiscal year ended March, exacerbating a severe coal shortage for power producers in Asia's third-largest economy.
Coal India, the world's biggest coal miner, has struggled to hit production targets for years because of failure get swift environmental and regulatory clearances, forcing expensive imports of more than 100 million tonnes annually.
It has also long delayed a plan to set up washeries to improve coal quality and has been accused by investors of not taking serious action on coal thefts.
The company posted a 5 percent drop in net profit for the January-March quarter to 40.13 billion rupees ($727 million), but net sales rose 29 percent to 194.19 billion rupees, helped by a price increase in February 2011.
Analysts had forecast net profit of 41.1 billion rupees on net sales of 179.4 billion rupees, a Reuters poll of brokerages showed.
The lower profit could intensify pressure from investors such as U.K. fund The Children's Investment Fund Management (TCI), which threatened legal action earlier this year after the company bowed to pressure from the government in January and reversed a price increase.
The government, which owns 90 percent of Coal India's equity, has also forced the company to sign guaranteed fuel supply pacts with India's power companies.
Coal India Chairman S. Narsing Rao told reporters in Kolkata that the company had not yet decided on raising prices.
Average domestic coal prices range between 1,600-1,700 rupees per tonne and are 40-70 percent below international spot prices, as they are capped by a government keen to provide cheap electricity.
On Monday, the Kolkata-based company said it produced 436 million tonnes of coal in the year ended March 31, compared to 431 million tonnes a year earlier.
The company could increase net sales by 6 to 7 percent in the current fiscal year at current prices, Rao said.
Margins during the quarter slipped after a provision in its results for a new wage pact that it signed with its workers on January 31. The agreement, which increased wages by 25 percent, has added about 60 billion rupees to the company's annual wage bill.
Coal India reported employee benefits expenses in the quarter nearly doubled to 90.68 billion rupees. Provisions and write-offs also jumped 53 percent to 5.7 billion rupees. It had made partial provision in earlier quarters for the wage increase.
Shares in Coal India, the country's fourth-most valuable company at about $36 billion, closed 0.5 percent higher in a Mumbai market that rose 1.2 percent. The stock has risen about 5 percent so far in 2012, roughly in line with the increase in the main index.
($1=55.2 rupees) (Reporting by Prashant Mehra in MUMBAI and Sujoy Dhar in KOLKATA; Editing by Tony Munroe)
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