Coal India Q3 review: Analysts split on e-auction recovery vs headwinds

Coal India released its Q3FY26 results on Thursday, after market hours. In the December quarter, the company reported a 15.8 per cent decline in consolidated net profit at ₹7,157.45 crore, as compared to ₹8,505.57 crore a year ago. 

 

In a filing to BSE, the Maharatna firm said that its sales dropped to ₹30,818.17 crore from ₹32,358.98 crore in the corresponding quarter of the previous fiscal. Check detailed results here.

 

At 12:03 PM, Coal India’s shares were trading 2.46 per cent lower at ₹408.8 per share. In comparison, the BSE Sensex was down 1.02 per cent at 82,821.65.

Brokerages’ view on Coal India 

Motilal Oswal Financial Services | Buy | Target: ₹500

Motilal Oswal said Coal India delivered a decent Q3FY26, led by a recovery in volumes, with e-auction volumes at 10 per cent of total and e-auction premium at 62 per cent. It raised FY26 adjusted profit after tax (PAT) estimates by 14 per cent to reflect the beat, while keeping FY27–28 forecasts unchanged, and expects e-auction volumes and premia to improve as demand recovers and inventories at mines and power plants deplete. 

 

Motilal forecasts a 2 per cent volume compound annual growth rate (CAGR) over FY25–28, translating into a 6 per centCAGR in revenue and Earnings before interest, tax, depreciation and amortisation (Ebitda), aided by a higher share of non-FSA and washed coal and an expansion in coal-washer capacity to improve market share in domestic coking/non-coking coal. While growth capex is expected to be funded through internal accruals, the brokerage said the company may consider debt for diversification into areas like renewable energy and coal gasification. 

JM Financial Institutional Securities | Reduce | Target raised to ₹400 from ₹398

JM Financial said Coal India’s Q3FY26 performance was mixed, with consolidated net revenue  down 5 per cent year-on-year (Y-o-Y) (broadly in line with estimates), as offtake moderated to 188 MT from 194 MT a year ago. Excluding a one-off ₹2,200 crore pay-scale revision adjustment, adjusted Ebitda fell 6 per cent Y-o-Y to ₹11,500 crorebut beat estimates by 14–15 per cent, aided by lower material costs that lifted Ebitda per tonne to ₹615. 

 

Adjusted PAT rose 4 per cent Y-o-Y, beating estimates by over 20 per cent, supported by lower depreciation and higher other income, while e-auction realisations declined 9 per cent Y-o-Y to ₹2,435/tonne. The brokerage cut its production estimate to 770 MT (from 820 MT) versus the company’s 875 MT target, citing the current pace of production/offtake, and flagged a structural headwind as thermal plant utilisation could gradually decline during solar hours, limiting coal demand growth. 

 

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