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Informist, Monday, Oct. 20, 2025

 

By Sunil Raghu

 

AHMEDABAD – The trend of muted domestic coal demand, which started in the last financial year, continued in the September quarter as well. Prolonged monsoon across the country also led to a fall in demand for electricity, which is mainly produced by burning coal. This hit Coal India on two fronts: first, sales volume under long-term supply contracts was lower and second, e-auction prices continued to cool from previous highs, as indicated by Coal India in the past quarter. While overall lower sales volume will negatively impact the top line, the fall in e-auction prices will impact the bottom line.

 

The world's largest coal mining company by production and sales volume is expected to report a 16% on-year and a steeper 39% on-quarter decline in its consolidated net profit for the September quarter to INR 53.0 billion, according to the average of estimates from seven brokerages. The top line is seen falling 3.1% on year and 17% on quarter to INR 297.4 billion, according to the average of estimates.

 

The highest estimate for profit is INR 62.5 billion by Motilal Oswal Financial Services Ltd. and the lowest is INR 34.4 billion by Nuvama Wealth Management Ltd. The highest projection for revenue is INR 312.4 billion by Emkay Global Financial Services Ltd. and the lowest is INR 273.0 billion by Kotak Securities Ltd. Coal India will detail its results for the September quarter on Oct. 29.

 

Brokerages expect a 2.0%-2.4% on-year decline in volume to around 164 million tonnes, based on the monthly production and sales volume for the September quarter that the company has declared. While brokerages expect the Maharatna company to partially offset the decline in volume through higher price realisations from sales under fuel supply agreements, lower e-auction prices during the quarter are likely to drag the overall revenue and profit down.

 

Coal India's blended realisation is expected to increase 2% on year to INR 1,664 per tonne and e-auction realisation is expected to rise 3% on year to INR 2,400 a tonne, as per estimates of Kotak Securities. On the other hand, Nuvama Wealth Management expects Coal India's blended price realisation to decline 1% on year to INR 1,612 per tonne and e-auction realisation to decline 11% on-year to INR 2,200 per tonne. Price realisation from long-term contract sales could increase 2% on year to INR 1,492 a tonne. Blended price realisation is the average price realisation from fuel supply agreements, e-auctions, and sales of washed coking and thermal coal.

 

Long-term coal supply contracts, often referred to as fuel supply agreements by Coal India, comprise the bulk of sales and make up around 80% of the sales volume, but it is the e-auctions that directly boost the company's profit. This is because the cost of mining is the same for the coal sold under supply agreements, where prices are notified and pre-set. However, at e-auctions, prices are entirely driven by demand and are set at least 20% higher by Coal India compared to the prevalent notified prices.

 

Coal India is expected to report an earnings before interest, taxation, depreciation and amortisation of INR 74.8 billion for the September quarter, according to the average of estimates of six brokerages. The highest projection for EBITDA is INR 97.5 billion by Emkay Global Financial Services and the lowest is INR 48.0 billion by Kotak Securities.

 

Monday, shares of Coal India ended at INR 390.60 on the National Stock Exchange, up 0.5% from the previous close. Coal India's shares have risen 4% since it reported its June quarter earnings on Aug. 1.

 

According to data available with Informist, nine brokerages have a 'buy' rating on Coal India with an average target price of INR 425. Two brokerages have a 'sell' call, while two others have a 'hold' rating on the stock.

 

The following are the Jul-Sept earnings estimates for Coal India from seven brokerages in descending order by the estimates of net profit in INR million:

 

Brokerage firm	Net sales (in million rupees)	Net profit (in million rupees)	EBITDA (in million rupees)
Motilal Oswal Financial Services Ltd.	298,782	62,539	84,868
Emkay Global Financial Services Ltd.	312,146	59,430	97,533
Anand Rathi Share and Stock Brokers Ltd.	300,915	58,392	--
Kotak Securities Ltd.	272,963	57,870	47,984
Systematix Shares and Stocks (India) Ltd.	295,300	55,100	73,800
JM Financial Institutional Securities Pvt. Ltd.	307,629	42,876	86,522
Nuvama Wealth Management Ltd.	293,918	34,447	57,891
Average	297,379	52,950.57	74,766.33

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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