Highlights

• Q3FY26 profit declined year-on-year and missed analyst estimates.
• Revenue fell as volumes and realisations weakened during the quarter.
• EBITDA margins narrowed by around 800 basis points year-on-year.
• Production and offtake declined, missing nine-month output targets.

Shares of Coal India Ltd (NSE: COALINDIA) declined 2.35% to ₹409.30 on February 13 at 3:30 pm IST, down ₹9.85 on the day. The stock moved lower after the company released its Q3FY26 earnings post market hours on February 12, with investors reacting to a year-on-year decline in profit, margin compression, and softer operational metrics.

Company Overview

Coal India is a Maharatna public sector enterprise and the world’s largest coal producer by volume. The company operates through multiple subsidiaries across coal-bearing regions in India and supplies coal to power generation companies, steel makers, cement producers, fertiliser units, and other industrial consumers. Its performance is closely linked to coal production volumes, offtake trends, pricing through e-auctions and linkages, and cost movements across mining operations.

Q3FY26 Financial Performance

For the December-ended quarter, the company reported consolidated net profit of ₹7,165 crore, down from ₹8,491 crore in the same quarter last year and marginally below analysts’ expectations of around ₹7,200 crore. On a sequential basis, profit rose 68% from ₹4,264 crore in Q2FY26. Consolidated revenue from operations declined 4.7% year-on-year to ₹30,818 crore, compared with ₹32,359 crore in the corresponding quarter last year, although it improved 14.5% quarter-on-quarter, reflecting a seasonal pickup in dispatches.

Operating expenses increased to ₹28,132 crore from ₹27,280 crore a year earlier. The company attributed the rise largely to executive pay scale upgrades across the group following a January 7, 2026 order by the Hon’ble High Court of Jabalpur. EBITDA declined to ₹10,285 crore from ₹13,753 crore in the year-ago period, while margins narrowed to 29.44%, representing a contraction of around 800 basis points on a year-on-year basis.

Operational Performance and Production Trends

Coal India’s physical performance during Q3FY26 showed a marginal year-on-year decline across key operational indicators. Coal production stood at 200.05 million tonnes (MT), down 1% from 202.02 MT in Q3FY25. Coal offtake also fell 3% year-on-year to 188.66 MT from 194.53 MT in the corresponding period last year. For the nine months ended FY26, coal production declined 3% to 529 MT, falling short of the company’s target of 605.38 MT for the period.

Pricing and Realisations

Average realisation from e-auction sales during the quarter declined to ₹2,434.56 per tonne from ₹2,684.79 per tonne in the year-ago period. The overall average realisation for coal supplied during Q3FY26 also eased to ₹1,638 per tonne, down ₹29 from the corresponding quarter last year. Lower pricing contributed to the decline in revenue and operating margins during the quarter.

Subsidiary Performance

Among Coal India’s eight subsidiaries, four reported a year-on-year increase in net profit. Mahanadi Coalfields Limited recorded a 23% rise in net profit to ₹3,143 crore during the quarter, according to the company’s earnings filing. Performance across other subsidiaries was mixed, reflecting variations in production levels, cost structures, and local operational conditions.

Dividend Announcement

Alongside the December-quarter results, the company announced a third interim dividend of ₹5.50 per share of face value ₹10 for FY26. The dividend declaration was made in line with the company’s stated distribution policy for the financial year.

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