Coal India slips 3% despite 57% jump in Q2 profit

dia Limited (COALINDIA) fell 3% to ₹380.40 on October 30, despite reporting a 57% year-on-year jump in Q2 FY27 consolidated net profit to ₹6,547.43 crore, from ₹4,167.14 crore. The results came out on October 29, along with a second interim dividend of ₹10.25 per share and a November 4 record date. Revenue from operations grew 21% to ₹44,178.74 crore. EBITDA rose 28% to ₹11,447 crore, and the EBITDA margin improved to 26% from 24%. Coal offtake rose 12% to 186 million tonnes, while production grew 4% to 151 million tonnes. The company credited higher per-tonne realisations and increased interest income on its cash deposits. On the surface, the quarter was strong. Margins expanded, offtake grew at a healthy pace, and the dividend keeps Coal India one of the market’s steadier income stocks. The 57% headline comes off a weak base. Last year’s Q2 profit of ₹4,167 crore was unusually low. Compared with the ₹6,275 crore reported in Q2 FY25, this quarter’s profit is up only about 4%, so it mostly marks a return to earlier levels. Part of the gain also came from other income rather than mining. Total expenditure rose 17% to ₹38,398 crore, and investors are worried about rising wage and diesel costs. Offtake running well ahead of production also means some sales came from existing stockpiles. The auditor also flagged that the board and committees lack enough independent directors. Investors should watch per-tonne realisations and e-auction premiums, wage and diesel cost trends, production growth versus offtake, and progress on board composition. The key question is whether Coal India can keep profits growing once the low base effect and support from other income fade. Disclosure: I do not hold any position in Coal India Limited. This post is for informational purposes only and is not investment advice.