Coal India jumps 4% as Iran war lifts global coal prices; analysts upbeat

Coal India shares rose over 4% as global coal prices surged amid Iran war and LNG supply disruptions. Analysts say higher e-auction premiums could support earnings

Coal India share price today: Coal India shares gained over 4 per cent in trade on Thursday, March 5, amid rising prices of coal in the global markets. 

The stock hit an intraday high of ₹453.4 per share on the BSE today, rising 4.2 per cent, supported by healthy volumes. Around 0.56 million shares had changed hands on Coal India counter by 9:58 AM as against a two-week average volume of 0.52 million shares.

  By comparison, the BSE Sensex index was up 0.6 per cent (464 points) at the time of writing this report.

 

Why is Coal India share price rising today?

Coal India share price rose in trade on Thursday after prices of coal used in power generation is rallied in response to the West Asia war. 

 

According to reports, prices of European thermal coal hit their highest level since October 2023 on Wednesday, while those of South African thermal coal has jumped to its highest level since August 2024.

  Newcastle Coal Futures – a key global benchmark for thermal coal futures – is up 13 per cent over the past one week and 26 per cent in one year. It is quoting around $131 a metric tonne.

  Meanwhile, the price for Northwest Europe steam coal, a high-energy thermal coal imported into Europe, jumped 16 per cent to $133.18 a metric tonne on Tuesday, and is up 26 per cent in a week.

  Coal prices are rising globally as investors anticipate rising demand due to reduced natural gas supply from major Middle Eastern exporters such as Qatar.

  Further, with Qatar halting production of LNG after it intercepted two Iranian drones near its energy facility in Ras Laffan Industrial City, market participants expect consumer demand shifting from gas to coal.

  A UBS report said that when gas generation gets expensive due to lack of LNG supply, "more coal power generation could take place, driving up the demand for thermal coal and hence price."  CHECK Stock Market LIVE Updates 

Does Coal India benefit from rising coal prices globally?

Analysts said the direct impact of rising global coal prices on Coal India Limited is limited as the state-owned company operates largely in a "regulated domestic market". However, rising coal prices may support its earnings through the "e-auction" channel.

  Coal India sells around 10-15 per cent of its coal through a Single Window Mode Agnostic (SWMA) e-auction. When coal prices in the global markets rise, domestic coal-using industries, including cement, steel, and sponge iron, turn to domestically produced coal rather than imported coal. 

The industries, thus, shift to CIL's auctions, driving up the "premium."

  Notably, in February 2026, Coal India recorded a 35 per cent premium over its notified (base) prices in e-auctions.

 

Analysts estimate that every $100 per tonne increase in e-auction realisations liekly boosts Coal India's earnings per share (EPS) by roughly 2 per cent.

 

Coal India outlook

According to analysts at Mirae Asset Sharekhan, Coal India is expected to remain the dominant coal supplier over the next decade led by power and steel demand, high cash flows, high-dividend utility-like franchise with moderate volume growth, cyclical but controllable earnings risk, and the possibility of new value being unlocked through subsidiary listings. 

"At CMP, CIL trades at current valuation of 4.5x/4x for FY27E/FY28E EV/Ebitda. We maintain our 'Buy' rating with a share price target of ₹500, taking into consideration that coal is an essential baseload stabilizer in India," it said in a Q3 result review report.

  Coal India reported a consolidated net profit of ₹7,160 crore in the December 2025 quarter (Q3FY26), down 16 per cent year-on-year but up 65 per cent quarter-on-quarter.

  Its consolidated revenue also slipped 4.7 per cent Y-o-Y to ₹30,818 crore, but rose 14.5 per cent Q-o-Q.

Total coal production for 9MFY26 fell 3 per cent Y-o-Y to 529.20 metric tonne, with offtake declining 3 per cent to 545.74 Mt.

  CIL said volume reductions, higher contractual cost, and weaker realisations impacted the company's Ebitda and margins in Q3.

  Adjusted Ebitda was down 24 per cent Y-o-Y for the quarter at ₹7,870 crore, but up 34 per cent Q-o-Q.

  "Coal India delivered a decent performance in Q3, mainly supported by volume recovery, where e-auction volumes accounted for ~10 per cent of total volumes and premium stood at 62 per cent in Q3FY26. We increase our APAT estimate by 14 per cent for FY26 to incorporate the performance beat, while we maintained our FY27/28 estimates," said those at Motilal Oswal Financial Services.

  Going forward, the brokerage expects e-auction volume and premium will recover, supported by demand recovery and depleting inventory at both mine and power plant levels.

  MOFSL has a 'Buy' rating with a target of ₹500 on CIL stock.

  Those at JM Financial, however, have a 'Reduce' rating on the stock with a target of ₹401 as they forecast lower production in months ahead.

  "Coal India has been given a target of producing 875 Mt for FY26. So far, it has produced 546 Mt (down 3 per cent Y-o-Y). Considering production of 529 Mt during 9MFY26 (543 Mt in 9MFY25), we estimate CIL to produce 770 Mt during FY26 versus our estimate of 820 Mt at the start of the year," it said.

  ====================  Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers' discretion is advised.