Coal India Q3 FY26: Profit Drops 16%; Declares ₹5.50 Dividend

Coal India Limited (CIL), the world’s largest coal producer and the backbone of India’s thermal power supply, reported weaker earnings for the December quarter, leading the stock to drop 3% (a 5-week low), as softer sales and higher expenses weighed on performance.

For the quarter ended 31 December 2025, the Maharatna PSU posted a consolidated net profit of ₹7,166 crore, down 15.8% from ₹8,491 crore in the corresponding period last year.

Sales declined to ₹30,818 crore, compared with ₹32,359 crore a year ago, while revenue from operations stood at ₹34,924 crore, lower than ₹36,858 crore in Q3 FY25. Other income increased to ₹2,392 crore (12%).

The board declared a third interim dividend of ₹5.50 per Coal India share for FY26, the record date for which is fixed as 18 February 2026.

Finance costs went up by 42% to ₹321 crore due to higher working capital loans in BCCL, ECL, and the holding company, as well as an increase in unwinding of discount on mine closure provisions. The increase in costs, combined with lower sales, compressed margins during the period.

Profit before tax, including share of profit from joint ventures, stood at ₹9,473 crore, down from ₹11,792 crore in Q3 FY25.

For the April–December period of FY26, revenue from operations came in at just over ₹1 lakh crore, compared with ₹1.05 lakh crore in the same period last year. Net profit for the nine-month period stood at ₹20,163 crore, down from ₹25,709 crore.

What Do Volume Trends Indicate?

Coal production during the first nine months of FY26 stood at 529.19 million tonnes (MT), lower than 543.36 MT in the year-ago period. Coal offtake during April–December came in at 545.74 MT, compared with 561.68 MT a year earlier.

Both production and dispatch were lower than last year, pointing to a softer demand environment. Given that Coal India supplies close to 80% of the country’s coal and feeds nearly three-fourths of coal-fired power plants, changes in its volumes tend to mirror broader electricity demand trends.

The company has a wide footprint, with operations spread across eight states. It runs 85 mining areas and oversees 310 active mines, made up of underground, opencast and mixed operations as of July 2025.

Looking ahead, Coal India has outlined a plan to raise output to 1 billion tonnes by FY29, compared with 781 million tonnes in FY25. The increase is aimed at narrowing reliance on imports and keeping pace with domestic energy demand.

What Does Q3 Signal for Coal India’s Outlook?

The December quarter highlights pressure on profitability amid easing volumes and rising expenses. While dividend payouts continue to provide income visibility for shareholders, earnings performance remains sensitive to demand trends and cost control.

Coal demand is closely tied to thermal power generation and industrial activity. Any sustained recovery in electricity consumption could help stabilise production and dispatch levels in the coming quarters.

At the same time, cost discipline will remain critical. Even marginal increases in operating expenses can affect margins in a volume-driven business such as coal mining.

Coal India’s broader role in meeting the country’s energy needs remains unchanged. Even so, the December quarter shows how short-term results can shift with seasonal demand, price movements and day-to-day operating conditions.

From a market perspective, attention is likely to stay on how volumes pick up in the coming quarters, how tightly costs are controlled and whether the dividend track record continues as the company moves toward its production targets.

Sources:

Business Today

Business Standard

ET

Elara Capital