Coal India Q2 FY26 Results — Margin Pressure Persists Amid Strong Production
Coal India, India’s largest state-owned coal producer, reported its Q2 FY26 results showing steady production but lower profitability due to wage inflation and weaker e-auction prices. Despite near-term margin compression, the company remains vital to India’s power supply and industrial fuel demand.
Financial Highlights — Q2 FY26
| Metric | Q2 FY26 | Q1 FY26 | YoY Change |
|---|---|---|---|
| Revenue | ₹38,590 Cr | ₹37,410 Cr | +3.2% |
| EBITDA | ₹9,200 Cr | ₹10,420 Cr | -11.7% |
| PAT | ₹6,140 Cr | ₹7,210 Cr | -14.9% |
The PSU major reported muted earnings as operational expenses rose and average realization softened. However, production efficiency and cost-control initiatives helped maintain healthy cash flow. The dividend payout policy continues to attract long-term investors.
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Peer Comparison
Peers such as Singareni Collieries and NTPC’s captive coal units faced similar cost headwinds this quarter. Global coal demand remains firm, but domestic pricing caps continue to weigh on margins across the sector.
Strengths & Weaknesses
✅ Leadership position in India’s coal production with strategic government support.
⚠️ Rising employee costs and regulatory pricing pressure continue to impact profitability.
Coal India’s large reserve base and near-monopoly position ensure long-term demand, though cost inflation remains a concern for short-term profitability.
Opportunities & Threats
💡 Expanding domestic power demand and import substitution initiatives support sustained volume growth.
📉 Transition toward renewable energy and ESG constraints pose long-term challenges.
The company’s dividend yield and strategic importance in India’s energy transition make it an appealing PSU for patient investors seeking value and cash flow stability.
Valuation & Investment View
Coal India currently trades around 6.7x FY26E earnings, offering a strong dividend yield near 7%. While short-term volatility persists due to cost dynamics, the long-term structure remains sound given rising power demand.
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- Short-term: Range-bound movement likely
- Medium-term: Accumulate on corrections
- Long-term: Attractive for dividend investors
Investor Takeaway
Derivatives and Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Registered Investment Adviser, observes that while Coal India faces a short-term margin drag, its long-term sustainability strategy and global positioning remain intact. A patient investor approach is key to capitalizing on its recovery phase at Indian-Share-Tips.com.
Related Queries on Coal India Results
Coal India Dividend Yield, PSU Stocks Outlook, Coal Sector Valuations, Nifty Energy Correlation
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
