Coal India Ltd – ₹35,000 Cr Profits but Still Digging in the Past?
1. At a Glance
Coal India Ltd (CIL), the government’s cash-guzzling ATM, is the world’s largest coal producer and one of India’s largest employers. Despite claiming “net zero” ambitions, 82% of its supply goes straight to thermal power plants. It makes mountains of profits, distributes fat dividends, and still manages to get fined by SEBI for non-compliance smaller than the cost of chai in its canteen.
2. Introduction
Imagine a company that contributes to 80% of India’s coal production, controls an industry like a mafia don, and still apologizes to the environment by planting token saplings. That’s Coal India Ltd. Born in 1973 after the nationalization of coal mines, it is a “Maharatna” PSU. Translation: government will never let it fail because without it, half the country will be sitting in darkness, and the other half will be scrolling Instagram by candlelight.
Coal India is less of a company and more of a public utility disguised as a listed entity. Its dividends are basically the government’s passive income strategy. And yet, investors complain about poor stock price growth – because while you were dreaming of multi-baggers, CIL was busy supplying coal to NTPC at regulated prices.
The irony is delicious: the same company that wants to set up 5 GW of solar power capacity is also targeting 1 billion tonnes of coal production by FY26. “Carbon neutrality by burning more carbon” – only in India can such jugaad logic exist.
But here’s the kicker – at a P/E of ~7, EV/EBITDA below 4, and a dividend yield nearing 7%, this coal elephant still generates free cash flow hotter than a Jharia coalfield fire. So, is it an environmental sinner or an investor’s saint?
3. Business Model – WTF Do They Even Do?
Coal India runs 318 mines across eight states. Out of these, 141 are underground (where productivity crawls like your Monday mood), 158 are opencast (big machines, big dust), and 19 are mixed. It also operates 13 coal washeries – basically giant laundries for dirty black rocks.
Its core offerings include coking coal (for steel), non-coking coal (for power plants), washed coal, middlings, rejects, and random byproducts like tar, light oil, and pitch. In short: everything a factory chimney dreams of inhaling.
Major customers? NTPC, state power boards, and steel companies. Translation: the company earns money from clients who themselves struggle with receivables, which explains why working capital is always messy.
Coal India doesn’t really “sell” coal – it allocates it. Being a monopoly, it’s more like rationing than marketing. FMC (First Mile Connectivity) projects are supposed to mechanize loading and evacuation. If they succeed, fewer truck unions will get hafta, but given PSU efficiency, don’t hold your breath.
So yes, Coal India digs, washes, and sells coal. And when it feels guilty, it signs an MoU for solar parks. Balance restored.
4. Financials Overview
Source table
Metric
Latest Qtr (Jun’25)
YoY Qtr (Jun’24)
Prev Qtr (Mar’25)
YoY %
QoQ %
Revenue
₹35,842 Cr
₹36,465 Cr
₹37,825 Cr
-1.7%
-5.2%
EBITDA
₹12,521 Cr
₹14,339 Cr
₹11,790 Cr
-12.7%
+6.2%
PAT
₹8,734 Cr
₹10,944 Cr
₹9,593 Cr
-20.2%
-8.9%
EPS (₹)
14.2
17.8
15.6
-20.2%
-8.9%
Commentary: EPS slipped faster than your New Year resolutions. Revenues are stagnant, profits are shrinking, but dividend cheques keep coming. Classic PSU priorities.
5. Valuation – Fair Value Range Only
P/E Method: EPS (₹53.8 annualized). Apply industry P/E of 11 → range: ₹592. Apply discount for PSU sluggishness, P/E of 7 → ₹376.
EV/EBITDA Method: EV ₹2.09 lakh Cr; EBITDA TTM ₹45,246 Cr. EV/EBITDA = 4.6. If fair range is 4–6 → Equity value implies ₹360–₹540.
