Near-term weakness in Coal India stock may be an entry point

The long-term rationale for investing in Coal India Limited (CIL) may be intact, even as it posted modest results for the April-June quarter (Q1) of financial year 2026 and faces increasing competition from captive production.

- DEVANGSHU DATTA

More thermal capacity is expected to come onstream, and the country's largest coal miner will remain the biggest player by far.

In Q1FY26, CIL reported revenue of ₹35,842 crore, a decline of 1.7 per cent year-on-year (Y-o-Y). Volume offtake decreased while realisation was almost flat. The adjusted EBITDA (ex-overburden removal) of ₹11,126 crore was down 3.6 per cent YoY. Consolidated PAT of ₹8,743 crore was down 20.2 per cent Y-o-Y because of low other income and higher depreciation.

Captive consumption and an early monsoon (reducing cooling demand) led to low volumes. The fuel supply agreement (FSA) volumes of 165.7 million tonne (Mt) were down 4 per cent Y-o-Y, while e-auction volumes fell 8 per cent Y-o-Y. The FSA realisation of ₹1,550 per tonne was up 2 per cent Y-o-Y. The e-auction realisation of ₹2,332 per tonne (50 per cent premium) was down 2 per cent Y-o-Y. The operating margin of 31 per cent decreased 61 bps Y-o-Y and adjusted EBITDA per tonne of ₹582 was flat. CIL declared an interim dividend of ₹5.5 per share.