Coal India shares dropped by more than 3% today, following the release of October production and offtake data. As of 10:18 am, the stock was trading at ₹439.85 on the NSE, reflecting a 3.15% decline.
October Performance and Year-to-Date Progress
In October, Coal India reported a slight 0.5% year-on-year (YoY) decrease in offtake, which stood at 61.4 million tonnes (MT) compared to the same month last year. Despite this minor drop in offtake, the company managed to increase its production by 2.3% YoY, producing 62.5 MT in October, up from 61.1 MT in October 2023.
For the cumulative period from April to October, Coal India has produced 403.8 MT, marking a 2.5% increase from the previous year. This figure represents 48% of the company’s ambitious full-year production target of 838 MT for FY25. The first half of the fiscal year usually sees lower production due to the monsoon season, with output typically ramping up in the latter part of the year.
Subsidiary Performance
Among its subsidiaries, Eastern Coalfields, Central Coalfields, Northern Coalfields, and Mahanadi Coalfields showed growth in production, ranging from 8% to 11%. Conversely, some subsidiaries experienced production declines between 5.5% and 11.1% compared to the previous year.
Analyst Insights
Brokerage firm Jefferies maintains a positive outlook on Coal India, pointing to India’s strong economic growth as a potential driver for continued volume growth in the coming years. Additionally, Jefferies noted that the significant drop in e-auction prices appears to be stabilizing. Coal India is currently valued at 9.3 times its projected FY26 price-to-earnings ratio, which Jefferies considers attractive.
However, the brokerage has adjusted Coal India’s Earnings per Share (EPS) estimates for FY25-FY27, reducing them by 2-3% due to anticipated fluctuations in market conditions.
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