Coal India Q3 Results FY26: Profit at ₹7,166 Crore as Realizations Weaken and Costs Rise

Coal India reported a weaker December quarter as profitability declined amid softer realizations, lower offtake, and a one-time employee cost provision. The PSU miner continues to operate in a stable domestic demand environment, with institutional capital flows largely driven by dividend yields and power sector coal demand.

Table of Contents

• Key Highlights
• Financial Performance
• Nine-Month Performance
• Margin and Cost Structure
• Production and Offtake Trends
• Realization and Sales Mix
• Employee Cost Impact
• Balance Sheet and Ratios
• Dividend and Capital Allocation Context
• Capital-Flow and Institutional Positioning
• Domestic Power Demand Cycle
• Coal Pricing Structure and Realization Drivers
• PSU Dividend Yield Cycle
• Multi-Year Production and Capacity Trends
• Capex and Mine Expansion Outlook
• Global Coal Market Context
• Policy and Energy Transition Risks
• Key Risks
• Outlook

Key Highlights

• Net profit declined to ₹7,166 crore in Q3 FY26.
• Revenue from operations fell to ₹34,924 crore.
• EBITDA declined to ₹10,285 crore.
• EBITDA margin dropped to 33% from 43% last year.
• Employee expenses rose due to pay revision provisions.

Coal India Q3 Results FY26: Financial Performance

Coal India reported revenue from operations of ₹34,924 crore, down from ₹36,859 crore in the same quarter last year. Net profit declined to ₹7,166 crore as margins compressed.

Coal India Q3 Results FY26: Nine-Month Performance

For the nine-month period, net profit declined to ₹20,163 crore due to lower realizations and higher costs.

Coal India Q3 Results FY26: Margin and Cost Structure

EBITDA margin declined to 33% from 43% in the same quarter last year.

Key factors behind margin compression:

• Lower average coal realizations.
• Higher employee costs due to pay revision provisions.
• Lower performance incentives.

Coal India Q3 Results FY26: Production and Offtake Trends

• Coal production: 200.05 MT vs 202.02 MT last year.
• Coal offtake: 188.66 MT vs 194.53 MT last year.

Production declined about 1% year-on-year, while offtake fell 3%.

Realization and Sales Mix

• Average realization: ₹1,638 per tonne vs ₹1,667 last year.
• Total sales volume: 188.17 MT vs 194.10 MT.

Lower realizations and reduced volumes directly impacted revenue and margins.

Employee Cost Impact

Employee benefit expenses included a one-time provision of ₹2,201 crore for pay upgradation.

This provision significantly increased operating costs during the quarter, contributing to margin compression.

Balance Sheet and Ratios

• Net worth: ₹1,06,376 crore.
• Debt-equity ratio: 0.14.
• Return on equity: 20% (not annualized).

The company maintains a strong balance sheet with low leverage.

Dividend and Capital Allocation Context

Coal India has historically maintained one of the highest dividend payout ratios among PSU companies. Strong cash flows and low debt allow consistent distributions to shareholders.

Dividend-driven capital flows are a key structural factor supporting the stock.

Capital-Flow and Institutional Positioning

Coal India remains a core PSU energy stock due to:

• Large index weight.
• High dividend yield.
• Stable domestic demand.

Institutional capital flows into the stock are typically driven by:

• Power demand growth cycles.
• Dividend yield strategies.
• PSU sector re-rating themes.

Domestic Power Demand Cycle

Coal India’s earnings are closely tied to domestic power demand, as the power sector accounts for the majority of coal consumption.

Key structural drivers:

• Rising electricity demand.
• Thermal capacity additions.
• Limited domestic alternatives in the short term.

This demand base provides stable long-term volume support.

Coal Pricing Structure and Realization Drivers

Coal India’s realizations depend on:

• Regulated linkage prices.
• E-auction premiums.
• Import parity pricing.

Lower e-auction premiums during the quarter contributed to realization declines.

Coal India Q3 Results FY26: PSU Dividend Yield Cycle

Coal India is typically viewed as a dividend yield stock. Capital flows increase when:

• PSU dividend yields rise.
• Bond yields stabilize.
• Commodity prices remain steady.

The company’s dividend policy is influenced by government fiscal expectations.

Coal India Q3 Results FY26: Multi-Year Production and Capacity Trends

Coal India’s long-term strategy focuses on:

• Incremental capacity expansions.
• Productivity improvements.
• Mechanization of large mines.

Production growth remains gradual, reflecting the mature nature of several operating mines.

Capex and Mine Expansion Outlook

Capital expenditure is focused on:

• New mine development.
• Evacuation infrastructure.
• Equipment modernization.

These investments aim to support stable long-term production growth.

Global Coal Market Context

Compared with global coal producers:

• Coal India operates with lower leverage.
• Dividend payouts are structurally higher.
• Pricing power is more policy-driven.

Policy and Energy Transition Risks

Long-term risks include:

• Renewable energy expansion.
• Carbon emission regulations.
• Policy shifts toward cleaner fuels.

However, thermal power remains a critical base-load source in India.

Key Risks

• Decline in coal realizations.
• Higher employee costs.
• Policy-driven pricing constraints.
• Power demand volatility.

Outlook

Coal India’s near-term outlook will depend on:

• Power demand growth.
• Domestic coal production targets.
• Cost normalization after pay revisions.
• Government dividend expectations.

The company remains positioned as a dividend-focused PSU energy stock supported by domestic power demand.

Internal Links

• ONGC Q3 Results FY26
• NTPC Q3 Results FY26
• Energy & PSU Sector Outlook 2026

External Sources

• Coal India Investor Relations
• BSE India
• NSE India