Coal India shares fall 2% after Q1 results. What are Jefferies, other brokerages saying?

Shares of state-owned Coal India dipped 2% to Rs 418 on the BSE on Tuesday after the company reported a consolidated net profit of Rs 8,852 crore for the first quarter of FY27, a rise of less than 1% from Rs 8,797 crore in the same period last year. On a sequential basis, however, net profit fell more than 18% from Rs 10,839 crore in the fourth quarter of FY26.

Revenue from operations stood at Rs 46,255 crore in Q1 FY27, up 8% year-on-year from Rs 42,919 crore in Q1 FY26. The figure was slightly lower than the Rs 46,490 crore reported in Q4 FY26. Coal India's total income increased more than 8% YoY to Rs 48,295 crore, while total expenses rose around 12% YoY to Rs 36,816 crore during the quarter.

What are experts saying?

Jefferies has retained its Buy rating on Coal India with a target price of Rs 500, implying an upside of 17%. The brokerage expects a recovery in power demand, potentially supported further by a weak monsoon, to aid Coal India's volumes in FY27. After a 12% decline in EPS over FY24-26, the brokerage expects the company's earnings trajectory to improve, with a 6% CAGR over FY26-29. It also said the stock's valuation at 8.7x FY27E PE remains attractive.


Coal India's dispatch volumes grew at a strong 10% CAGR between FY21 and FY24, but growth slowed to 1% YoY in FY25 and declined 2% YoY in FY26 amid subdued power demand, which rose just 1% YoY in FY26. Power demand has since started to recover, with June-quarter demand increasing 8% YoY. Jefferies said a potential below-normal rainfall due to the El-Niño event could provide a further boost, as lower rainfall typically increases power demand for agriculture and residential use.

The Jefferies India utilities team recently raised its FY27 power demand growth estimate to 7%, noting that steam demand is still left even with the summer behind. The brokerage factors in a 5% CAGR in Coal India's dispatch volumes over FY26-29E.

Nuvama has maintained its Reduce rating on Coal India with a target price of Rs 396. The brokerage said the company is missing key growth levers, while costs are likely to rise. Coal India could report 4-5% YoY volume growth in FY27, although this would be on a low base. However, its inability to pass on higher costs is limiting earnings growth.

Employee costs are also expected to increase with the next wage revision for non-executives, which is due from July 2026 onwards. Nuvama noted that the rise in global coal prices presents an opportunity for Coal India to increase domestic coal prices, but this has not happened so far. The only silver lining, according to the brokerage, is the stock's attractive dividend yield of 6%, with DPS estimated at Rs 26.5 per share in FY27E and FY28E.

Dolat Capital has maintained its Accumulate rating on Coal India, with a target price of Rs 490, implying an upside of 15%. The brokerage said Q1 FY27 EBITDA came in below estimates, while adjusted PAT posted a modest beat.

Looking ahead, Dolat expects Coal India's volumes to grow at a 5% CAGR over FY26-28E, aided by the low base of FY26. Along with stability in e-auction realisations, this is expected to drive a 9.1% EBITDA CAGR, although the upcoming wage revision could limit earnings growth.

Also read: India's steel ambitions face a coal reality check

On a segment-wise basis, revenue from the coal segment rose 8% YoY to Rs 46,249 crore. The company's solar energy segment reported revenue of Rs 5.68 crore in the June quarter. Earnings per share stood at Rs 14.36 in Q1 FY27, compared with Rs 14.27 in Q1 FY26 and Rs 17.59 in Q4 FY26.

Coal India announces dividend

Alongside its Q1 results, Coal India declared an interim dividend of Rs 5.50 per share for FY27. The record date for determining shareholder eligibility has been fixed for July 31.

The dividend will be paid to eligible shareholders on or before August 25 this year. The company has declared 33 dividends since February 2011. The stock has a dividend yield of 6.18% at the current market price, according to Trendlyne data.

Coal India share price performance

The stock has declined nearly 1% over the past week and 2% over the past month, while it remains up around 7% so far in 2026.

Over a longer period, Coal India shares have gained more than 12% in one year, 86% in three years and nearly 200% in five years. The company currently has a market capitalisation of more than Rs 2.63 lakh crore.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)