Coal India (COAL IN) – Q3FY26 Result Update – Import substitution key to growth – HOLD
Published on 13 Feb 2026
Coal India Ltd (COAL) is navigating near-term market share pressures amid flat domestic coal production, with YTDFY26 COAL volumes declining 2% YoY, while captive output continues to gain traction. However, sizable coal imports (~244mt) present a meaningful import-substitution opportunity that could support incremental volumes and stabilize market share over time for COAL (Exhibit 4). Operational performance in Q3FY26 was impacted by lower e-auction realizations and a one-off Rs22bn wage provision. The balance sheet remains strong with cash and including internal accruals, result in a healthy FY26E dividend yield of ~6%. Over the medium term, a Rs800bn capex pipeline focused on core mining expansion, coal gasification and thermal power, positions the company for sustained production growth and diversification. Valued at 5.0x FY28E EBITDA (last 10-year average 5.5x), we arrive at TP of Rs436 per share and ‘HOLD’ rating, balancing earnings visibility and attractive yield at 6% against recent market share challenges.
