Coal India Share Price Up On Announcement Of Additional Charge; Brokerages Bullish

Coal India Ltd. saw its share price rise over 3% on Friday, after it announced it would levy an additional charge of Rs 300 per tonne across all mines of its wholly owned subsidiary, Northern Coalfields Ltd., starting May 1.

The new charge, termed the 'Singrauli Punarasthapan Charge', will be applied uniformly across all NCL mines and is in addition to the existing notified price of coal. According to the company’s exchange filing, this move is expected to generate additional revenue of approximately Rs 3,877.50 crore.

Brokerages including Morgan Stanley and JPMorgan have a bullish outlook on the stock.

Morgan Stanley has maintained an ‘overweight’ rating on Coal India with a target price of Rs 525 per share. The firm views the recent price hike as a positive development. The new levy, which constitutes 2.5% of the fiscal year ending March 2026 revenue, suggests an 8% upside risk to the fiscal 2026 earnings estimates. A key factor to monitor will be whether the company can implement additional price hikes beyond this. Currently, Morgan Stanley is forecasting a 2% growth in fuel supply agreement realisations.

JPMorgan has maintained a ‘neutral’ rating on Coal India and raised the target price to Rs 420 per share from Rs 395. The announcement of the fuel supply agreement price hike is seen as a positive surprise. JPMorgan anticipates that the flow-through to the estimated Ebitda for the fiscal years ending March 2026 through March 2027 could be 8-9%. Additionally, Northern Coalfields, which is the third largest subsidiary of Coal India, contributes 18% to the sales mix.

For the third quarter ending Dec. 31, 2024, Coal India reported a consolidated profit of Rs 8,506 crore, down from Rs 10,253 crore in the same period the previous year. Revenue from operations for the quarter slightly decreased to Rs 35,779.74 crore, compared to Rs 36,154 crore in Q3 FY24.

On the operational front, earnings before interest, tax, depreciation, and amortisation declined by 5% year-on-year to Rs 12,317 crore, although this was higher than the forecasted Rs 11,407.8 crore. The Ebitda margin contracted to 34.4% from 35.9%.

The scrip rose as much as 3.27% to Rs 365.70 apiece. It pared gains to trade 2.34% higher at Rs 372.35 apiece, as of 10:30 a.m. This compares to a 1.18% decline in the NSE Nifty 50.

It has fallen 70.35% in the last 12 months. Total traded volume so far in the day stood at 1.36 times its 30-day average. Relative strength index was at 30.