The performance in Q4 profitability is on the back of better-than-expected e-auction premiums, lower employee cost, and lower reversal from stripping activity.
Global brokerage firm Citigroup has maintained a ‘Neutral’ rating on Coal India Ltd
., while raising its target price to ₹395 per share from ₹390 earlier. This revised target implies a potential upside of 4.4% from Wednesday’s closing price.
Citi mentioned that Coal India’s earnings before interest, taxes, depreciation, and amortization (EBITDA), excluding the overburden removal (OBR) adjustment reversal, were 6% above expectations for the fourth quarter.
The company’s blended realisations and volumes remained largely flat on a year-on-year basis. Realisations from e-auctions declined 2% quarter-on-quarter but rose 2% year-on-year. While e-auction prices remain stable, Citi believes there is limited room for further upside due to existing coal inventory levels.
Citi also said that the stock is currently trading near its five-year average valuation.
Although current valuations may offer downside support, the brokerage sees limited visibility on triggers for further upside.
Nuvama Institutional Equities has maintained a ‘Hold’ rating on Coal India, with a target price of ₹405.
The brokerage said that both coal prices and volumes remained largely flat on a year-on-year basis. Nuvama said it prefers to wait for a pickup in volume growth before considering a more favorable entry into the stock.
Meanwhile, Coal India is gradually losing market share due to rising coal production from captive mines. In financial year 2025, the share of captives rose to 19%, up from 15% in the previous year.
Although Nuvama has factored in a 3% compound annual growth rate (CAGR) in volumes over FY25 to FY27E, it highlighted that risks remain.
Any potential hike in the notified price under Fuel Supply Agreements (FSA) is expected only in FY27E, when Coal India will also need to implement wage increases for non-executive employees, the brokerage added.
Emkay Global has maintained a ‘Buy’ rating on Coal India, with an unchanged target price of ₹475 per share.
The brokerage said that valuations remain attractive, with the stock trading at a one-year forward price-to-earnings (P/E) ratio of 7 times, compared to its 10-year average of 9.7 times.
“While we estimate Coal India’s production reaching 820mt in FY26 from 781mt in FY25, we expect e-auction premiums to normalise to around 50%, directionally taking cue from the declining global benchmark thermal coal prices,” Emkay wrote in its note.
Out of the 24 analysts that have coverage on Coal India, 17 of them have a ‘Buy’ rating, five have a ‘Hold’ rating, while two others have a ‘Sell’ recommendation on the counter.
Shares of Coal India Ltd. settled 1.44% higher on Wednesday at ₹383.80. The stock is flat so far in 2025.
