At a Glance
Coal India is the OG PSU dividend machine, churning out ₹35,000 Cr profit annually from digging rocks. It has 48% ROCE, 6.5% dividend yield, almost no debt… and also no friends in the ESG investing world. But who cares when it’s spitting ₹10,000 Cr+ per quarter?
1️⃣ The Dinosaur That Pays You to Not Care 🦕💰
- Coal India is not a startup.
- It doesn’t do “subscriptions”, “SaaS”, or “AI”.
- It does one thing: coal mining at national scale.
Yes, it is the largest coal producer in the world.
Yes, it still sells 700 million tonnes annually.
No, it’s not worried about Tesla.
Instead, it focuses on:
- Power plants 🔌
- Rail logistics 🚂
- And paying out big dividends 🍾
2️⃣ Financials: PSU Fat Cat or Profit Machine? 😼
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 90,026 | 1,09,715 | 1,38,252 | 1,42,324 | 1,43,369 |
| Net Profit (₹ Cr) | 12,702 | 17,378 | 31,723 | 37,369 | 35,302 |
| Operating Margin | 21% | 23% | 32% | 34% | 33% |
| Dividend Payout | 78% | 60% | 47% | 42% | 46% |
| ROCE | 46% | 54% | 78% | 64% | 48% |
| ROE | 46% | 48% | 53% | 47% | 39% |
| Debt | ₹3,514 Cr | ₹4,331 Cr | ₹6,523 Cr | ₹9,146 Cr | 🧊 negligible |
🧾 Cash on books (FY25): ₹29,200 Cr
💸 Dividend Yield: 6.5% (yes, better than most FDs)
3️⃣ Quarterly Trends: Still Printing 💸
- Q4 FY25 Net Profit: ₹9,593 Cr
- Q4 Sales: ₹37,825 Cr
- Q4 OPM: 31%
And remember:
- Power demand is up.
- Renewables aren’t ready to replace base-load.
- India still generates 70% of its electricity using coal.
So unless you’re charging your EV with unicorn tears, you’re probably using CIL indirectly.
4️⃣ So Why Has the Stock Crashed 17% in a Year? 📉
Because stock market loves stories.
And Coal India doesn’t have one.
- ❌ No green energy pivot (just some token solar JVs)
- ❌ No massive capex or AI-for-coal pitch deck
- ❌ No retail investor fantasy — it’s still PSU, still bureaucratic
- 📉 Also, FY25 growth was flat YoY (just 1% topline)
- 📉 FII holding dropped to 7.74% (from 9.16%)
So what do you get?
Huge profits ✅
High cash flow ✅
But no multiple expansion ❌
5️⃣ Valuation: Is It Cheap or Rightly Ignored? 📊
- Current Price: ₹392
- EPS (TTM): ₹57.4
- P/E: 6.8
- Book Value: ₹161 → P/B ~2.4x
Let’s say FY26 PAT stays flat at ₹35,000 Cr
Implied EPS ~₹57
Assign fair P/E range:
| Case | P/E | FV |
|---|---|---|
| PSU pessimism | 7x | ₹400 |
| Dividend compounding case | 10x | ₹570 |
| “Coal Renaissance” fantasy | 12x | ₹685 |
🎯 Fair Value Range: ₹400–₹570
(Assuming status quo and dividends continue)
6️⃣ Shareholding Drama + Retail Mania 🎭
| Stakeholder | FY23 | FY24 | FY25 |
|---|---|---|---|
| Promoter (Govt of India) | 66.13% → | 63.13% → | 63.13% |
| FIIs | 7.84% → | 9.16% → | 7.74% ↓ |
| DIIs | 21.05% → | 22.56% → | 23.35% ↑ |
| Public | 4.9% → | 5.02% → | 5.68% ↑ |
| Retail Shareholders | 13.2 L → | 20 L → | 22.8 L 🚀 |
🫠 Retail buying the dip for dividends.
🧑⚖️ GoI has to meet divestment targets too, so expect some supply.
7️⃣ EduInvesting Verdict 🎓
Coal India is not a 10x stock.
It’s a 6.5% dividend PSU bond with upside potential.
Unless:
- Govt forces a mega solar push
- Or energy prices globally spike
- Or someone decides to spin off logistics & ports biz
…it will remain what it is.
But sometimes, boring is beautiful. Especially when it pays.
✍️ Written by Prashant | 📅 June 26, 2025
Tags: Coal India, PSU stocks, Maharatna, dividend stocks, high ROCE, carbon economy, power sector, ESG vs profits, EduInvesting, value stocks
