Coal India supply growth is outpacing production

Coal India Limited increased coal supplies by 12.5% YoY to 61.20 million tonnes in September FY27. Power-sector supplies rose 10.63% to 48.90 million tonnes, while production increased 9.18% to 53.50 million tonnes. The more interesting number is the gap between supply and production growth. Supply is growing faster because Coal India is using its accumulated pithead inventory. The company has already liquidated around 63 million tonnes of pithead stocks during the first half of FY27. H1 supplies rose 7.6% to 384.2 million tonnes. That has helped meet rising power demand. India's power shortage reached a three-year high in September even though coal-fired plants were operating at elevated utilisation levels. This creates a slightly different read on the stock. Higher offtake is positive for revenue visibility, but part of the growth is coming from inventory liquidation rather than an equivalent increase in production. The next question is whether production can catch up as the post-monsoon period improves. My view: Coal India's supply momentum is positive and the power-demand backdrop remains supportive. But I would not treat 12.5% supply growth as sustainable earnings growth until production starts matching the pace of offtake. What I am watching next: October production, daily offtake and whether the company can maintain supply growth without relying heavily on pithead inventory