Coal India Ltd (CIL) is facing headwinds as weak power demand has dimmed its growth prospects in the second quarter of fiscal year 2025-26 (Q2FY26), leading to lowered earnings visibility. The state-run miner reported a 32% decline in net profit for Q2FY26, with consolidated net profit at ₹4,262.64 crore, compared to ₹6,274.80 crore in Q2FY25.

Financial Performance The decline in profit was attributed to reduced sales and increased expenses. CIL's revenue from operations for the quarter stood at ₹30,186.7 crore, down 3.2% year-on-year and 15.8% sequentially. Sales contributed ₹26,909.23 crore to the revenue, marginally lower than the ₹27,271.3 crore in Q2FY25. The company's total expenses increased by 7.1% to ₹26,421.86 crore from ₹24,670.70 crore in the same quarter last year.

Earnings before interest, tax, depreciation and amortisation (EBITDA) stood at ₹5,850 crore, a decline of 24% year-on-year. The EBITDA per tonne also dropped to ₹352, down ₹105 per tonne year-on-year.

Production and Sales Volume In volume terms, Coal India's sales were 165.99 million tonnes (mt) compared to 168.11 mt in Q2FY25. Total production during the first six months of FY26 was 329.14 mt, down 4% from 341.34 mt in the year-ago period. Unseasonal rain affected opencast coal production, while power generation from thermal sources in the first six months of FY26 was down 5% from the corresponding period the previous year. Coal sales through e-auction were 15.31 mt during Q2FY26, with an average realization of ₹2,292.40 per tonne, compared to ₹2,453.92 per tonne in Q2FY25. Sales through fuel supply agreements (FSA) were marginally down at 147.46 mt compared to 148.21 mt in Q2FY25; however, realization per tonne from FSA sales was higher at ₹1,478.39 per tonne against ₹1,466.33 per tonne in Q2FY25.

Factors Affecting Performance Several factors contributed to Coal India's subdued performance in Q2FY26:

• Weak Power Demand: A slowdown in thermal power generation led to reduced demand for coal.
• Lower Volumes: The company's production declined by 4% year-on-year, with dispatches falling by 2%.
• Elevated Inventory Levels: High stock levels may have impacted sales and pricing.
• Soft E-Auction Premiums: E-auction premiums were softer, potentially affecting revenue.
• Higher operating costs: Increased costs weighed on earnings.

Dividend Announcement Despite the decline in profit, Coal India's board declared a second interim dividend of ₹10.25 per share with a face value of ₹10 for FY2025-26. The record date for the dividend is November 4, 2025, and payments will be made by November 28, 2025.

Analyst Views Brokerages have presented divided opinions on Coal India's stock. While some, like Motilal Oswal, maintain a bullish stance based on recovery prospects in the second half and longer-term growth visibility with a target price of ₹440, others, such as Nuvama Institutional Equities and Emkay Global, remain cautious on the near-term outlook. Nuvama has trimmed its FY26E and FY27E EBITDA estimates by 3% and 2%, respectively, to factor in lower volume and prices.

Challenges and Opportunities Coal India faces several challenges, including:

• Evolving energy policy framework
• Environmental regulations
• Competition from captive miners
• Declining demand for thermal coal

However, there are also opportunities for Coal India:

• Increasing domestic coal supplies
• Meeting increasing electricity demand
• Technological advancements

Stock Performance Following the earnings announcement, Coal India shares declined by 1.99% on October 29, 2025, trading at ₹383.50. On October 30, 2025, the share price experienced fluctuations, with some sources indicating a drop and others showing a slight gain.