Coal India Ltd. is set to announce its financial results on Wednesday for the second quarter of the financial year ending March 2026, with analysts expecting muted performance.
Most analysts are expecting lower volumes and subdued earnings on the back of weak power demand and elevated inventory levels. The slowdown in thermal generation has weighed on offtake, while global coal price softness has kept e-auction premiums under pressure.
Despite the near-term weakness, realisations are expected to remain broadly stable year-on-year, supported by steady FSA-linked pricing. According to Bloomberg estimates, the Ebitda will fall 2.4%, reflecting both weaker dispatches and moderation in premiums.
While the immediate outlook remains cautious, brokerages see medium to long-term fundamentals as intact, aided by structural growth in domestic power demand and ongoing efficiency measures. However, the lack of short-term triggers and weak volume momentum could limit upside potential in the stock for now.
Coal India Q2 Results Preview (Bloomberg Estimates) (Consolidated, YoY)
Revenue likely to rise 11.5% to Rs 30,394.36 crore versus Rs 27,271.3 crore.
Net profit likely to fall 9.5% to Rs 5,692.52 crore versus Rs 6,289.10 crore.
Ebitda likely to fall 2.4% to Rs 8,409.3 crore versus Rs 8,617.09 crore.
Margin at 27.7% versus 31.6%.
Morgan Stanley | Rating: Equal Weight | Target: Rs 410
Production down 4% year-on-year and dispatches fell by 2%.
Realisations expected to stay flat year-on-year, though e-auction prices and premiums could soften.
Weak power demand may keep volumes and e-auction premiums subdued in the near term.
Long-term demand outlook remains healthy on the back of steady power consumption growth.
Improved cost efficiency and operational streamlining expected to support medium-term earnings.
Domestic and FSA-linked business ensures cash flow stability.
Valuations are attractive but lack immediate re-rating triggers.
Key monitorables: Coal volume trajectory, domestic/global price trends and cost ratio movement.
Upside risks: Faster production ramp-up, higher domestic coal prices and stronger cost savings.
Downside risks: Weaker power demand, softer e-auction realisations and potential dividend cuts.
Jefferies | Rating: Buy | Target: Rs 384.6
Expects a weak quarter with Ebitda down 5% year-on-year and 35% quarter-on-quarter.
Dispatch volumes slipped 2% year-on-year to 164 mt.
Cash Ebitda per tonne seen at Rs 408 down 4% year-on-year and 26% quarter-on-quarter.
Maintains price target based on 9x FY27E adjusted P/E.
Key risk: Weaker-than-expected volume recovery or pricing pressure in coming quarters.
JM Financial | Rating: Hold | Target: Rs 372
Stable quarter with muted top-line growth but steady profitability.
Revenue expected to remain flat year-on-year at Rs 30,800 crore due to lower dispatches.
Offtake likely at 164 mt versus 168 mt last year.
Modest rise in realisations expected to offset volume dip.
Equirus Securities | Rating: Reduce | Target: Rs 360
Production is constrained by elevated inventories, though levels have eased from fiscal 2025 peaks (111mt).
Market-share loss to captive miners and softer thermal generation continue to weigh on dispatches.
Thermal power output down 4.9% year-on-year (Apr–Aug), while hydro generation up 14.5% year-on-year.
Realisations seen stable.
Ebitda per tonne is expected to remain steady.
No change factored in for employee cost revisions.
Watch for: Fiscal Year 2026 volume outlook, overburden accounting treatment, and effective cash tax rate.
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