COALINDIA

Hits 52-Week High on Strong Q4

(CIL) shares rose 6% over three days, touching a 52-week high of ₹491.25, after robust Q4FY26 results and a surge in power demand. Investor optimism is supported by rising temperatures, record electricity consumption, and forecasts of a weaker monsoon. However, higher input costs from the West Asia war and structural shifts toward renewables pose risks to earnings sustainability. Financial Performance (Q4FY26) Revenue: ₹46,500 crore (+6% YoY). EBITDA: ₹12,300 crore (+8% YoY, adjusted for prior-period charges). 9MFY26 EBITDA: –10% YoY, highlighting recovery in Q4. Accounting change: government levies added to revenue with offsetting entry in expenses. Valuation: trades at ~6x FY27E EBITDA (Bloomberg consensus). Demand Drivers Peak power demand: 256 GW on 25 April, surpassing the previous record of 250 GW (May 2024). Electricity consumption (Apr 1–27): +9% YoY. Near-term outlook: extended summer and El Niño-driven weaker monsoon expected to sustain coal demand. Risks & Challenges Input costs: explosives and fuel costs rising due to West Asia war; estimated impact ₹3,500–4,000 crore annually (9–11% of FY26 EBITDA). Renewables: RE generation up 15% YoY in Q4, while coal-fired generation fell 1%. Captive mining: growing share reduces reliance on CIL. Offtake trends: FY26 offtake fell 2.4% (vs. +1% in FY25, 6.7% CAGR FY20–24). Brokerage Views Consensus: modest 1–3% offtake growth projected FY26–28. Emkay Global: more optimistic, factoring 6% CAGR FY27–28, supported by ~7% power demand growth and reduced Indonesian supply quotas. Conclusion Coal India’s Q4FY26 results highlight resilient profitability and strong near-term demand, but structural risks from rising input costs and renewable penetration remain. The stock’s trajectory will hinge on whether summer-driven demand sustains into FY27 and if volume growth can exceed modest projections.