At a Glance
Coal India’s Q1 FY26 results are out, and let’s just say the coal dust isn’t the only thing settling—so is their profit. Revenue slid 4% YoY to ₹35,842 Cr while profit tanked 20% YoY to ₹8,734 Cr. Yet, the board pulled a “don’t cry” card with a ₹5.50/share interim dividend. With a P/E of 7.01, a sky-high ROCE of 48%, and a yield fatter than your savings account at 6.78%, this Maharatna continues to shovel cash into investors’ pockets—even while profits cool. Oh, and they’re dabbling in renewables because why not?
Introduction
Coal India Ltd, the government’s favorite cash cow that also happens to dig up literal black gold, just coughed up its Q1 FY26 numbers. If you expected a blockbuster, sorry to disappoint. This quarter is more “slow burn” than “raging furnace.” Revenue slipped, profits plunged, and yet the dividend party is still on. Classic PSU move.
But here’s the twist—while thermal power plants still love Coal India’s output, the world is screaming for green energy. So, the company’s board decided to sprinkle renewable buzzwords in their strategy decks. Investors? Half hopeful, half yawning.
Let’s unpack the drama, the data, and the dirt (literally).
Business Model (WTF Do They Even Do?)
Coal India’s business is as straightforward as it gets: they dig coal, wash coal, and sell coal. They hold about 80% market share in India’s coal production, which powers more than 70% of the country’s electricity. This monopoly is as juicy as it sounds, except it’s under constant pressure from environmentalists, renewable transitions, and occasional mining strikes.
Revenue streams? Mostly thermal coal to power plants, metallurgical coal to steelmakers, and the occasional supply to cement and brick kilns. Recently, they’ve been experimenting with solar projects and coal-to-gasification tech—because apparently, every company wants to look woke on sustainability.
The business model’s strength: guaranteed demand (for now). The weakness: heavy regulatory oversight and a carbon footprint so big it makes SUVs look like bicycles.
Financials Overview
- Q1 FY26 Revenue: ₹35,842 Cr (↓4% YoY)
- Q1 Net Profit: ₹8,734 Cr (↓20% YoY)
- EBITDA Margin: ~35% (still meaty)
- EPS: ₹14.19 (TTM EPS ₹53.78)
- Annual Revenue (FY25): ₹1.43 Lakh Cr
- Annual PAT (FY25): ₹35,302 Cr
Commentary: The profit drop isn’t cute, but margins stayed strong at 35%. Why the dip? Lower sales volumes, higher employee costs, and a soft quarter for power demand. The dividend (₹5.50) softens the blow for investors—like giving candy after a bad report card.
Valuation
Let’s crunch the fresh P/E (because we do math, not magic):
- TTM EPS: ₹53.78
- CMP: ₹376
- P/E: 7.0 (dirt cheap or value trap?)
Fair Value Range
- P/E Method:
- Industry Avg P/E: ~10
- Fair Value = 10 × 53.78 = ₹538
- EV/EBITDA:
- EV ≈ MCap (₹2.32 Lakh Cr) – Cash (₹29,200 Cr) + Debt (₹9,146 Cr)
- EBITDA TTM: ₹45,246 Cr
- EV/EBITDA ≈ 4.1 (fair ~6×)
- Fair Value ≈ ₹550
- DCF (rough & dirty):
- Assuming FCF growth 5%, WACC 10%
- Implied value ≈ ₹500–₹520
Verdict: Fair value ₹500–₹540. CMP ₹376? Value investors are licking their lips.
What’s Cooking – News, Triggers, Drama
- Q1 profit down, but dividend flows like beer at an IPL afterparty.
- New renewable projects announced—PR-friendly but execution TBD.
- Capex for new mining blocks & washeries to keep production steady.
- Policy support continues: power sector still addicted to coal.
- The looming threat: carbon taxes, ESG funds ghosting PSUs.
Balance Sheet
| (₹ Cr) | FY25 |
|---|---|
| Assets | 2,60,198 |
| Liabilities | 1,51,948 |
| Net Worth | 99,105 |
| Borrowings | 9,146 |
Remarks: Debt? Pocket change. Net worth? Rock solid. Auditor’s joke: “Balance sheet so clean, even coal dust won’t stick.”
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 35,734 | 18,103 | 29,200 |
| Investing | -23,465 | -4,486 | -10,076 |
| Financing | -13,704 | -13,899 | -13,308 |
Remarks: Ops cash flow strong, but investing is a black hole (capex galore). Financing? Mostly dividends because that’s their love language.
Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 39% |
| ROCE | 48% |
| P/E | 7.0 |
| PAT Margin | 24% |
| D/E | 0.09 |
Remarks: Ratios scream “sexy,” but growth is the party pooper.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 1,38,252 | 1,42,324 | 1,43,369 |
| EBITDA | 44,232 | 47,971 | 47,063 |
| PAT | 31,723 | 37,369 | 35,302 |
Remarks: Revenue flat, profit yo-yo. Still, margins are fat like a well-fed PSU.
Peer Comparison
| Company | Revenue | PAT | P/E |
|---|---|---|---|
| Coal India | 1.43 L Cr | 35,302 | 7.0 |
| Sandur Manganese | 3,135 Cr | 471 Cr | 15.5 |
| Foundry Fuel | — | — | N/A |
Remarks: Peers? What peers? Coal India is the Godzilla of coal.
Miscellaneous – Shareholding, Promoters
- Promoter (Govt): 63.13% (steady)
- FIIs: 8.16%
- DIIs: 22.66%
- Public: 5.93%
Promoter Bio: The Government of India—a promoter who takes dividends like a hungry teenager raids a fridge.
EduInvesting Verdict™
Coal India remains the ultimate dividend sugar daddy. At ₹376, it’s trading like a bargain PS5 during a Flipkart glitch sale. The balance sheet is a fortress, cash flows are robust, and margins are rock solid.
But, there are headwinds:
- Global decarbonization is a real threat.
- Q1 shows growth stagnation.
- Policy changes could bite.
SWOT Analysis
- Strengths: Monopoly, cheap valuation, high dividends.
- Weaknesses: Sluggish sales growth, heavy regulations.
- Opportunities: Renewable diversification, coal gasification.
- Threats: ESG backlash, carbon taxes, demand shift to renewables.
Final Word: For now, Coal India is the PSU uncle who hands out cash every quarter. Long-term? Watch the green transition closely.
Written by EduInvesting Team | 31 July 2025
SEO Tags: Coal India, PSU Stocks, Q1 FY26 Results, Dividend Stocks, Indian Energy
