New Delhi: Coal India Limited (CIL), the state-run coal mining major, reported a 20% year-on-year (YoY) decline in consolidated net profit at ₹8,734.17 crore for the first quarter of FY26, as subdued sales realisation and a steep fall in other income weighed on profitability. The bottom line also declined 9% sequentially from ₹9,592.53 crore in Q4 FY25.
Revenue Weak Despite Higher Output
CIL’s revenue from operations slipped 4.4% YoY to ₹35,842.19 crore, even as coal production rose 8% YoY to 189.32 million tonnes (MT). The mismatch between production and earnings growth highlights continued pricing pressure and tepid demand.
Coal offtake declined 4% to 190.45 MT, while the average sales realisation dropped 2.2% to ₹1,654 per tonne from ₹1,692 a year earlier. Even with a marginal rise in the premium e-auction share to 17.5%, realisations could not offset the weakness in regular sales.
Margins Under Strain
Operating profit (EBITDA) for the quarter stood at ₹13,916.43 crore, with the EBITDA margin contracting to 38.8% from 47% in Q1 FY25 and 41% in Q4 FY25. Net profit margin also narrowed to 24.4%, down from 29.2% in the year-ago quarter.
Operating expenses rose modestly by 2.2% to ₹25,893.12 crore, but profitability was impacted by:
- 18% increase in depreciation and amortisation
- 21% fall in stripping activity adjustment, a non-cash cost component
- 27% jump in finance costs to ₹265.11 crore
- 7% increase in other expenses, including provisioning, security, and CSR initiatives
Other Income and Return Metrics Decline
Total income for the quarter stood at ₹37,458.05 crore, marking a 4.9% YoY and 10.3% QoQ decline. Other income plunged to ₹1,615.86 crore – a 16.6% YoY and 52% QoQ fall, driven by lower interest income and fewer reversals/writebacks.
Coal India’s return on average equity (RoAE) dropped to 33.6% (annualised) as of June 2025. However, the book value per share improved to ₹175.36, up from ₹160.81 at the end of March 2025.
Dividend Announcement
Despite margin pressure, the board approved an interim dividend of ₹5.50 per equity share.
- Record date: August 6
- Payout scheduled: By August 30
Outlook
Analysts caution that profitability may remain under pressure in the coming quarters unless:
- E-auction prices firm up,
- Operational efficiencies improve,
- Cost structures are optimised.
However, robust coal production, strong liquidity, and dividend payouts underscore Coal India’s financial resilience despite near-term challenges.
