The company declared a final dividend of ₹5.15 per share, with a total dividend payout of ₹26.5 per share in FY25
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Target: ₹480

CMP: ₹385.20

Coal India has delivered a decent performance in Q4-FY25 after a muted show in H1-FY25. The e-auction premiums softened during FY25, which got offset by better e-auction volume (about 10 per cent share to total sales volume). The company’s focus on increasing coal-washer capacity will improve its market share in domestic coking/non-coking coal. Further, management is focusing on the expansion of coal mines, which would be funded via internal accruals, or COAL might borrow to undertake certain projects.

For FY26/FY27, we largely maintain our estimates and expect volumes to improve, which would boost earnings performance. The e-auction premium is expected to remain stable at 70 per cent going ahead.

The company declared a final dividend of ₹5.15 per share, with a total dividend payout of ₹26.5 per share in FY25. Incorporated a new subsidiary, Coal Gas India, in March, marking its foray into the coal-to-chemical segment. The venture is a collaboration with GAIL (India) with a shareholding structure of 51 per cent (COAL) and 49 per cent (GAIL). The venture aims to establish a modern coal-to-synthetic natural gas (SNG) plant in the ECL command area.

We expect Coal India to clock an 8 per cent volume CAGR during FY25-27. This would translate into 11 per cent revenue and 14 per cent EBITDA CAGRs. At CMP, the stock is trading at 3.3x FY27E EV/EBITDA.

Published on May 8, 2025