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COAL reported a sharp 2QFY27 EBITDA (ex-OBR) miss, with EBITDA of Rs74bn falling 29%/24% short of our/consensus estimates, driven by weaker eauction realizations and a 12% qoq increase in cost/t amid higher explosives costs. PAT fell 26% qoq to Rs65.5bn, missing estimates by 23-25%. Blended realizations rose 1.4% yoy, with FSA prices up 4.2% yoy to Rs2,192/t, partly offset by lower e-auction premiums averaging 40.6%. Production declined 10.8% qoq to 151.3mt, while offtake stood at 186mt, down 5.8% qoq but up 12.2% yoy. We cut FY27E earnings by 8% but retain FY28-29E volumes, factoring in 4-5% offtake growth supported by robust power demand and potential tightening in Indonesian coal supply. We retain ADD and TP of Rs475.

Sharp EBITDA miss; cost pressures weigh on earnings

COAL reported a significant miss on EBITDA (ex-OBR) performance during 2Q, with EBITDA at Rs73.9bn missing our and consensus estimates by 29% and 24%, respectively. This was mainly driven by lower-than-expected e-auction realizations and a 12% qoq increase in cost/t, partly reflecting higher explosives costs amid Middle Eastrelated disruptions. Reported EBITDA stood at Rs114.5bn, down 17% qoq and below our estimate of Rs138.3bn, while EBITDA/t stood at Rs614 vs Rs725 in 1QFY27. PAT at Rs65.5bn fell short of our/consensus estimates by ~23%/25%, respectively, and declined 26% qoq and 15% yoy. Revenue came in at Rs442bn, down 5% sequentially owing to lower offtake and e-auction realizations, partly offset by a qoq increase in FSA prices. EPS stood at Rs10.6, below both our and consensus estimates. COAL also declared a second interim dividend of Rs10.25/sh, broadly in line with expectations.

Weak production; resilient dispatches

COAL’s blended realizations improved ~1.4% yoy in 2QFY27, although these remained below expectations. FSA realizations rose 4.2% yoy to Rs2,192/t, while e-auction realizations remained broadly flat at Rs3,082/t, with the average premium moderating to 40.6% from 47% in 1QFY27, despite a sharp recovery to 59% in Aug-26 and 94% in Sep-26. Operationally, production declined 10.8% qoq to 151.3mt, albeit up 3.8% yoy, reflecting weaker sequential performance at SECL and WCL. Offtake stood at 186mt, down 5.8% qoq but up 12.2% yoy, supported by higher dispatches from SECL and NCL.

Earnings cut on weak 2Q; maintain ADD

We expect a negative stock reaction following the weak 2QFY27 performance and cut our FY27E earnings by 8%. However, we retain our FY28-29E production and offtake estimates, factoring in 4-5% offtake volume growth, supported by robust power demand and an expected ~7% increase in power consumption. We expect e-auction premiums to stabilize at ~45% over the medium term, with e-auction volumes contributing 13-14% to total offtake. A potential reduction in Indonesia’s coal production target to 700mt in CY26 (vs 790mt in CY25) could provide further support. We retain ADD and TP of Rs475.

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