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Informist, Tuesday, Feb. 10, 2026

 

By Sunil Raghu

 

MUMBAI – The slump in demand for domestic coal to generate electricity that began last financial year, continued into the December quarter too. The prolonged monsoon across the country till late November exacerbated this fall as demand for electricity fell. This saw Coal India's sales volume under long-term supply contracts fall. As indicated by Coal India in the past quarters, the e-auction prices, too, continued to cool from previous highs. While overall lower sales volume negatively affected 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 26% on-year fall but a steep over 44% on-quarter jump in its consolidated net profit for the December quarter to INR 62.87 billion, according to the average of estimates from seven brokerages. The top line is seen falling nearly 13% on year and rising nearly 7% on quarter to nearly INR 322 billion, according to the average of estimates.

 

The highest estimate for profit is INR 72.96 billion by Kotak Securities Ltd. and the lowest is INR 48.6 billion by Systematix Stocks and Shares (India) Ltd. The highest projection for revenue is INR 345.1 billion by Motilal Oswal Financial Services Ltd. and the lowest is INR 289.6 billion by Elara Securities (India) Pvt. Ltd. Coal India will detail its results for the December quarter on Wednesday.

 

Coal India has already announced its sales volumes for the December quarter. It recorded 186 million tonnes of coal sales for Oct-Dec, down 4% on year and up 12% on quarter.  

 

Brokerages expect the Maharatna company to partially offset the decline in volume through higher price 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, comprise the bulk of sales and make up for 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 with the prevalent notified prices.

 

Coal India's blended realisation is expected to fall 2% on year to INR 1,633 per tonne and e-auction realisation is expected to fall 10% on year to INR 2,300 a tonne, as per estimates from Kotak Securities. On other hand, Nuvama Wealth Management expects Coal India's blended price realisation to decline 1.9% on year to INR 1,636 per tonne and e-auction realisation to decline 16% on year to INR 2,250 per tonne. Price realisation from long-term contract sales could increase 1% on year to INR 1,530 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 earnings before interest, taxation, depreciation and amortisation of INR 88.53 billion for the December quarter, according to the average of estimates. The highest projection for EBITDA is INR 108.81 billion by Emkay Global Financial Services and the lowest is INR 67.05 billion by Kotak Securities.

 

At 1215 IST, shares of Coal India traded flat at INR 431.45 on the National Stock Exchange. Coal India's shares have risen over 10% since it reported its September quarter earnings on Nov. 1.

 

According to data available with Informist, nine brokerages have a 'buy' recommendation on Coal India with an average target price of INR 425. This is 1.4% lower from the stock's closing price on Tuesday. Two brokerages have a 'sell' call, while two others have a 'hold' recommendation on the stock.

 

The following are the Oct-Dec earnings estimates for Coal India from seven brokerages in descending order by the estimates of net profit in INR billion:

 

Brokerage firm	Net sales	Net profit	EBITDA
Kotak Securities Ltd.	303.54	72.96	67.05
Emkay Global Financial Services Ltd.	303.77	69.96	108.81
Nuvama Wealth Management Ltd.	340.76	69.18	98.35
Motilal Oswal Financial Services Ltd.	345.10	64.72	91.55
Elara Securities (India) Pvt. Ltd.	289.56	57.36	81.09
JM Financial Institutional Securities Pvt. Ltd.	344.80	57.30	98.48
Systematix Shares and Stocks (India) Ltd.	323.60	48.60	74.40
Average	321.59	62.87	88.53

 

End

 

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

 

Edited by Akul Nishant Akhoury

 

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