The company reported a 30% year-on-year (YoY) decline in consolidated net profit, which stood at Rs 4,354.24 crore for Q2 FY26 compared to Rs 6,249.10 crore in the same quarter of the previous year.
The decline in profitability comes as the company faced higher expenses and weaker revenues during the quarter. Total expenses rose by 7.7% YoY to Rs 26,421.46 crore in Q2 FY26, up from the previous year’s levels.
Revenue from operations also took a hit, dipping 3.2% YoY. It came in at Rs 30,186.7 crore in Q2 FY26, slightly lower than Rs 31,181.89 crore reported in Q2 FY25. On a broader basis, the company’s total income fell by 1.1% YoY, settling at Rs 31,181.89 crore during the quarter.
Despite the overall fall in earnings and income, the company announced a second interim dividend of Rs 10.25 per share for FY 2025–26. The record date for determining shareholder eligibility has been fixed as November 4, 2025.
After the company’s Q2 results, here is what investors should do:
Motilal Oswal: Buy | Target price: Rs 440
Motilal Oswal has maintained a ‘Buy’ rating on Coal India with a target price of Rs 440.The brokerage noted that Coal India delivered a muted performance in the second quarter of FY26, largely due to weak volumes, as e-auction volumes accounted for around 10% of total volumes, with the premium standing at 55%. Consequently, Motilal Oswal revised its FY26 revenue, EBITDA, and adjusted PAT estimates downward by 4%, 8%, and 6%, respectively, to factor in the subdued near-term outlook.
However, the firm expects e-auction volumes and premiums to recover in the second half of FY26, driven by a pickup in demand from the non-FSA (Fuel Supply Agreement) sector. Over the medium term, Coal India is projected to post a 3% compound annual growth rate (CAGR) in volumes over FY25–28, translating into a 5% CAGR in revenue and 7% CAGR in EBITDA.
Motilal Oswal added that the company’s focus on expanding its coal washer capacity will enhance its market share in the domestic coking and non-coking coal segments. Management also continues to prioritise the expansion of coal mining operations, which will be funded primarily through internal accruals. However, Coal India may consider raising debt to finance strategic diversification projects, including renewable energy facilities and coal gasification initiatives.
Choice Broking: Sell | Target price: Rs 290
Choice Broking has maintained a ‘Sell’ rating on Coal India with a target price of Rs 290 per share, arguing that its low valuation multiples (~5x EV/EBITDA, 9x P/E, and 1x EV/CE for FY27E) are misleading and represent a value trap.
The brokerage cited concerns including discounted pricing, an unfavourable sales mix, high capex, restricted cash flows due to long-term provisions, and declining Gross Calorific Value (GCV) across subsidiaries.
As Coal India pays out nearly all of its post-capex free cash flow as dividends, Choice Broking values the company using the Dividend Discount Model (DDM), focusing solely on its dividend-paying potential rather than growth.
Elara: Accumulate | Target price: Rs 432
Elara Capital has maintained its ‘Accumulate’ rating on Coal India with a target price of Rs 432, valuing the stock at 5x FY28E EV/EBITDA. The brokerage flagged a weak Q2 performance, citing a 3% YoY decline in revenue and a 32% YoY drop in PAT, attributed to lower output and subdued power demand.
EBITDA fell 22% YoY, with margins contracting to 22%. On the pricing front, e-auction realisations dropped 6.6% YoY, while Fuel Supply Agreement (FSA) realisations inched up 0.8% YoY.
Production and offtake volumes also disappointed, with coal production down 4% and offtake down 1% YoY, both falling short of internal targets. Elara expects FY26–28 earnings to decline by 19–21% due to weak volumes and lower premiums.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)