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Robust Offtake Volumes Underpinned Operational Performance

Est. Vs. Actual for Q2FY27: Revenue – BEAT; Adj EBITDA – MISS; PAT – MISS

Change in Estimates post Q2FY27 Result

FY27E/28E: Revenue: -9%/0%; Adj. EBITDA: 2%/-6%; Attrib. PAT: 10%/-1%

Recommendation Rationale

* Sales Volume Saw Healthy Growth: CIL’s coal production in Q2FY27 stood at 151 MT (up 4% YoY) against a target of 158 MT, with production increasing YoY across subsidiaries except at NCL and NEC. Meanwhile, coal offtake registered healthy growth of 12–13% YoY to 186 MT. Overburden removal (OBR) grew steadily by 1% YoY to 353 M.CuM (vs. a target of 374 M.CuM).

* EBITDA Missed Consensus on Cost Pressures: Reported EBITDA stood at Rs 8,499 Cr (up 29% YoY), missing consensus estimates, led by higher contractual, employee, and other operating expenses. Adjusted EBITDA (excluding stripping activity adjustments) came in at Rs 7,394 Cr (up 29% YoY).

* Moderation in E-Auction Premium Offset by Volumes: The e-auction premium moderated to 51% in Q2FY27 compared to 57% in Q2FY26. Overall ASP (excluding other charges) stood at Rs 1,647/t (up 6% YoY), driven by higher FSA realizations of Rs 1,510/t (up 4% YoY), while e-auction realizations remained flattish at Rs 2,283/t. Strong e-auction volumes of ~23 MT (up from 15 MT in Q2FY26) helped cushion overall blended revenue.

Sector Outlook: Positive

Company Outlook & Guidance: CIL continues to offer robust downside protection supported by an attractive, sustainable dividend yield of ~6%. Sustained volume execution remains the primary driver of operational leverage, where we model conservative offtake volumes of 801 MT for FY27E and 837 MT for FY28E. Robust domestic thermal power generation coupled with depleted stockpiles at power plants will accelerate coal offtake and inventory liquidation over the near to medium term.

Current Valuation: 6.0 x EV/EBITDA on Adj. FY28E EBITDA (Unchanged)

Current TP: Rs 470/share (Unchanged)

Recommendation: We maintained our BUY rating.

Financial Performance: Coal India reported a mixed set of numbers in Q2FY27, with topline outperforming while operating profitability lagged expectations. Net sales stood at Rs 44,179 Cr, up 21% YoY, beating our estimates by 9%. EBITDA came in at Rs 8,499 Cr (up 29% YoY) with an EBITDA margin of 19.2%, missing consensus estimates by 13%. Adjusted EBITDA (excluding OBR) stood at Rs 7,394 Cr (up 29% YoY), with an adjusted EBITDA/tonne of Rs 397/tonne (up 14% YoY). Attributable net profit stood at Rs 6,516 Cr, up by 53% YoY, but 6% below consensus estimates. The board declared a 2 nd interim dividend of Rs 10.25/share.

Outlook

Coal India’s near-term volume trajectory remains fundamentally supported by rising domestic thermal power generation and lean inventory levels across critical power plants, which should accelerate coal offtake and dispatch velocity over H2FY27 and FY28E. However, near-term operating realizations face pressure from softening e-auction premiums, which moderated to 51% in Q2FY27 (vs. 57% YoY) alongside flat QoQ e-auction pricing. Factoring in these headwinds, we conservatively trim our e-auction price realizations across FY27E/28E, underpinning our downward adjustments to both consolidated Net Sales and EBITDA estimates.

Valuation & Recommendation

We value the stock at 6.0x 1-year forward EV/EBITDA multiple (unchanged) on FY28E Adj. EBITDA (Unchanged). Based on this

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