Coal India Stock Surges 4% Following Q4 Earnings Release, Brokerages Express Caution Amid Mixed Outlook

Coal India Ltd Sees Sharp Rise in Stock Value Following Q4 FY26 Performance

Coal India Ltd stock experienced a significant surge in early trade on Tuesday after the company reported a steady Q4 FY26 performance, with earnings exceeding expectations in certain areas. The stock was trading at Rs 471.85, up 4.3 percent, making it the top gainer on the Nifty 50 index.

The PSU coal major reported an 11.15 percent year-on-year rise in net profit at Rs 10,839 crore for the January-March quarter, compared with Rs 9,751.6 crore a year ago. Revenue grew 5.8 percent to Rs 46,490 crore. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) increased 6.2 percent to Rs 12,673.2 crore. However, EBITDA margin remained flat at 27 percent, indicating some pressure on operating profitability.

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The company's board recommended a final dividend of Rs 5.25 per equity share for FY26, subject to shareholder approval.

Operationally, trends remained mixed. Coal production for March declined 1.5 percent year-on-year to 84.5 million tonnes, while offtake rose marginally by 0.7 percent to 69.5 million tonnes. The company also highlighted expansion initiatives, including a 750 MWh battery energy storage project in Telangana and plans to invest around Rs 3,300 crore in eight coking coal washeries.

Brokerages maintained a broadly constructive stance on the stock, supported by valuations and dividend yield, even as they flagged near-term headwinds. Jefferies cited an 8 percent year-on-year growth in cash EBITDA during the fiscal fourth quarter that beat estimates. The brokerage expects earnings to grow at a 5 percent Compound Annual Growth Rate (CAGR) over FY26-28 after a decline in the previous two years. Further, Jefferies highlighted attractive valuations at 9.3 times FY27 earnings along with a dividend yield of around 6 percent.

However, HSBC has a more cautious 'hold' rating with a target price of Rs 440. It said that the earnings beat was largely driven by higher other income, while inventory levels have risen significantly. The brokerage warned that elevated inventories at power plants could cap e-auction premiums, and flagged potential cost pressures if diesel prices rise. It also sees limited earnings catalysts in the near term, although dividend yield provides some support to valuations.

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Coal India shares have risen 18.5 percent over the past one year, outperforming the Nifty 50, which is down around 1 percent during the same period.