Coal India Ltd. share price target

We maintain our HOLD rating.

Revenue for 2QFY26 came at INR302b (-2% YoY and -16% QoQ), against our estimate of INR299b. The decline was mainly led by muted volume.

Marred by extended monsoons coal-based thermal power generation touched a ~30-mth low of 99.29GW in Sep’25, dampening the thermal coal off-take volume.

India’s total installed power capacity reached ~490GW as of Jul’25, grew at 7.8% CAGR over the past 15 years. Renewable energy (~237 GW, 49% share) has surpassed thermal capacity (~220 GW, 44% share), where RE and thermal grew at 10.9% and 6.5% CAGR, respectively, over the past 15 years.

Coal India Ltd (CIL) is one of the largest coal producer in the world, with its output totalling 781 million tonnes (MT) in FY2025. It aims to increase coal production to 1 billion tonnes by FY2028-29. The company has 14 fully owned subsidiary companies...

Q1FY26 consolidated revenue of Rs. 35,842 crore was down 1.7% y-o-y. Volume saw a de-growth while the realization was almost flat y-o-y.

We downgrade to a HOLD from a BUY rating.

1QFY26 revenue came in at INR358b (-2% YoY and -5% QoQ) against our est. of INR372b. Adj. EBITDA (excluding OBR exp) stood at INR111b (-4% YoY and -1% QoQ) against our estimate of INR115b.

We retain the BUY rating.

COAL reported a strong quarterly performance, with Q4FY25 EBITDA at Rs132.9bn (+2.5% vs Emkay; +17.3% vs consensus). The performance in Q4 profitability is on the back of better-than-expected e-auction premiums, lower employee cost, and lower reversal from stripping activity.

Q4FY25 consolidated revenue of Rs. 37,825 crore was up 1.1% y-o-y. Volume and realization growth were both tepid and almost flat y-o-y. The volume growth has been slow overall due to increase in captive consumption of coal.

We see CIL’s FY25 performance to be impacted by possibly stagnant volumes, though e-auction price remains relatively stable. Production and offtake volumes until Feb’25–YTD was impacted by rake unavailability, inclement monsoons and ongoing production issues at SECL.

We retain the BUY rating after the recent price correction.

With dispatches of ~862m tonnes expected in FY26 and ~900m tonnes in FY27, Coal India offers healthy volume assurance, driven by mounting demand by the power sector.

Coal India (COAL)’s 3QFY25 revenue came in at INR358b (YoY/QoQ: -1%/ +17%), in line with our estimate of INR367b, primarily led by strong volumes (YoY/QoQ: +2%/+15%).

Coal India (COAL) reported production of 202mt in 3QFY25, reflecting 2% YoY growth. As a result, total production for 9MFY25 reached 543mt (+2% YoY), while dispatches stood at 556mt (flat YoY). Of the total dispatches, ~85% were supplied to the thermal power industry.

Over the past 12-18 months, investors were enthused by a large-cap stock delivering volumes growth CAGR of 7-8%, alongside an improving demand outlook resulting in solid earnings momentum.

Coal India Limited (CIL) has had low volume growth this year (YTDFY2025) as the second quarter was impacted by stronger than expected monsoon season. The resulting weak power demand affected the coal offtake.