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Informist, Thursday, Apr. 23, 2026

By Sunil Raghu

AHMEDABAD – The slump in demand for domestic coal to generate electricity, year-on-year fall in e-auction prices, lower production, depressed sales, and falling operating margin are expected to hit Coal India Ltd.'s net profit for the March quarter. Unseasonal rains in several parts of the country and the military conflict in West Asia--which has affected industrial production across many sectors--have exacerbated the problem for the world's largest coal-miner with demand for electricity remaining relatively subdued this summer. While the overall lower sales volume will have a negative impact on the top line, the fall in e-auction prices will affect the coal behemoth's bottom line.

Coal India, the world's largest coal-mining company by production and sales volume, is expected to report a year-on-year fall of 5% but a quarter-on-quarter jump of over 27% in its consolidated net profit for the March quarter to over INR 91 billion, according to an average of estimates from 10 brokerages. The top line is seen falling just about 1% on year and rising over 7% on quarter to nearly INR 375 billion, according to the estimates.

The highest estimate for net profit is INR 101.9 billion from Elara Securities (India) Pvt. Ltd. and the lowest is INR 82.7 billion from Anand Rathi Share and Stock Brokers Ltd. The highest projection for revenue is INR 398.1 billion by Elara Securities and the lowest is INR 337.6 billion by Kotak Securities Ltd. Coal India will detail its results for the March quarter Monday.

Coal India has already announced its sales and production volumes for the quarter. It recorded 69.5 million tonnes of coal sales for the three months, down 0.7% on year, as production fell 1.5% on year to 84.5 million tonnes. Brokerages expect the Maharatna company to partially offset the decline in volume through higher realisations from sales under fuel supply agreements, but lower e-auction prices during the quarter are likely to drag down the overall revenue and profit.

Long-term coal supply contracts, often referred to as fuel supply agreements by Coal India, make up the bulk of the company's sales and around 80% of its sales volume, but it is the e-auctions that directly boost its 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, and in e-auctions. However, at the auctions, prices are driven by demand and Coal India sets the reserve price at least 20% higher than the prevalent notified prices.

Improvement in blended realisation will not be able to completely offset the decline in volume and Coal India's top line is expected to fall due to lower sales volume. Coal India's blended realisation is expected to rise a mere 1% on year to INR 1,707 per tonne and e-auction realisation is expected to rise 2% on year to INR 2,573 a tonne, as per an estimate from Kotak Securities. On the other hand, Nuvama Wealth Management expects Coal India's blended price realisation to rise 1.4% on year to INR 1,726 per tonne and e-auction realisation to decline 6.3% on year to INR 2,450 per tonne. Price realisation from long-term contract sales could increase 1% on year to INR 1,563 a tonne. Blended price realisation is the average price realisation from fuel supply agreements, e-auctions, and sales of washed coking and thermal coal.

Coal India is expected to report a year-on-year drop of over 15% in its earnings before interest, taxation, depreciation, and amortisation for the March quarter to nearly INR 113 billion, according to an average of 10 estimates. The highest projection for EBITDA is nearly INR 137 billion by Emkay Global Financial Services Ltd. and the lowest is nearly INR 66 billion by Kotak Securities.

Wednesday, shares of Coal India ended marginally higher at INR 444.15 on the National Stock Exchange. The stock has risen nearly 6% since Coal India reported its December quarter earnings on Feb. 12.

Of the 10 brokerage reports on Coal India available with Informist, seven have a "buy" recommendation on the stock with an average target price of INR 490. This is nearly 11% higher than the stock's closing price Wednesday. Two brokerages have a "sell" call while one says "hold".

The following are the Jan-Mar earnings estimates, in INR billion, for Coal India from 10 brokerages in descending order of the estimate of net profit:

End

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

Edited by Rajeev Pai

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