Coal India — Q4 FY25 earnings call

Call held 14 May 2025

Management summary

Coal India's investor meet focused on addressing flat FY25 volumes and laying out the growth roadmap. Management attributed shortfalls to localized issues at SECL and CCL rather than demand weakness. FY26 guidance is ambitious at 875MT (15%+ growth) backed by improving FMC infrastructure, growing non-power linkages, and import substitution opportunity. E-auction premiums remain healthy at 40%. Key risks include captive mine ramp-up eating into CIL market share and upcoming wage revision in Jun 2026. The Rs 80,000 Cr capex plan includes coal gasification and thermal power diversification.

Highlights

  • FY25 volumes nearly flat due to production shortfalls at SECL (heavy rainfall) and CCL (EC/FC clearance delays)

  • FY26 production guidance: 875 million tonnes, FY27: 900+ million tonnes

  • E-auction premiums at ~40% over notified prices; long-term average 30-40%

  • First Mile Connectivity (FMC) rake loading up 32% YoY to 72.7 rakes/day; targeting 100 rakes/day by Q2 FY26

  • Non-power long-term linkages grew 29% from 90MT to 115MT in 2 years

  • Captive/commercial mines expected to produce 320MT by FY30 vs current ~200MT

  • Capex of Rs 19,500 Cr in FY25; Rs 80,000 Cr planned over next 4-5 years

  • Wage revision due Jun 2026 (non-executive) and Jan 2027 (executive)

  • Employee count at 2.2 lakh; ~12,000 superannuating annually, 1,000-1,500 recruited

Concerns

  • Captive/commercial mines growing share at CIL's expense

  • 875MT FY26 guidance seen as too optimistic

Key financials

5 periods

Headline

  • Stripping Ratio
    2.67
  • Employee Count
    2,20,000 employees
  • OBR Liability on Balance Sheet
    ₹58,000 Cr
  • Tax Receivable from Authorities
    ₹15,000 Cr
  • Bridge Linkage Commitments
    22 million tonnes

Q4

  • FY25 E-auction Premium
    43%

FY25

  • Coal Supply to Power Sector
    614 million tonnes
  • Non-Power Supply Growth
    147 million tonnes
    YoY +10%
  • E-auction Volumes
    89 million tonnes
  • Capex
    ₹19,500 Cr

FY25 avg

  • FMC Rake Loading
    72.7 rakes/day
    YoY +32%

Apr-May FY26

  • FMC Rake Loading
    87.1 rakes/day

What they filed

Q1 FY27: revenue up 7.8%, net profit up 0.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue31,182 36,859 37,825 42,919 30,187 −3%34,924 −5%46,490 +23%46,255 +8%
EBITDA8,617 12,317 11,790 12,588 6,716 −22%9,331 −24%12,673 +7%12,069 −4%
Net profit6,275 8,491 9,593 8,788 4,263 −32%7,166 −16%10,908 +14%8,850 +1%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Production

  • FY26 Production/Offtake Production · FY26 · Medium confidence 875 million tonnes
    875 million tonnes

    — Mukesh Agrawal

  • FY27 Production Production · FY27 · Low confidence 900+ million tonnes
    That is around 900 plus

    — Mukesh Agrawal

  • Long-term Production Target Production · FY29-30 · Low confidence 1 billion tonnes by FY29, 1.043BT by FY30
    From 1 BT to 1.1 BT, there is slightly a plateau which is happening, 28-29, 1, 29-30, 1.043.

    — Mukesh Choudhary

Infrastructure

  • FMC Rake Loading Infrastructure · Q2 FY26 · Medium confidence 100 rakes/day
    100 rakes will come by Q2 itself when the new silos will come.

    — Mukesh Choudhary

Capex

  • Total Capex Plan Capex · 4-5 years · High confidence Rs 80,000 crores over 4-5 years; ~Rs 20,000 Cr annually
    Around 20,000 crores capex will continue for the next three to four years.

    — Mukesh Agrawal

E-auction

  • E-auction Premium Range E-auction · FY26 · Medium confidence 30-40%
    The guidance is that we are going to be somewhere between 30-40.

    — Mukesh Choudhary

Risks & concerns

  • Captive/commercial mines growing share at CIL's expense

    high

    Captive mines to reach 320MT by FY30 from ~200MT. CIL focusing on long-term linkages (90MT→115MT) and import substitution (60-100MT opportunity).

    Analyst compensating through import substitution, non-power linkage growth, and e-auction volumes

  • 875MT FY26 guidance seen as too optimistic

    high

    Last 3 years struggled with double-digit growth. FY25 was nearly flat. 15% jump requires significant acceleration.

    Analyst will assess by h1; banking on secl/ccl recovery and fmc improvements

  • Wage revision due Jun 2026 and Jan 2027

    medium

    Employee cost will reduce for one year then jump post wage revision. 12,000 retire annually vs 1,500 recruited.

    Management will take call at board level; not committed to offsetting via fsa price hikes

  • Stripping ratio consistently increasing

    medium

    Rising stripping ratio increases OBR costs and operational complexity.

    Analyst acknowledged (2.67 currently) but no specific mitigation discussed

  • Railway infrastructure delays (Jharsuguda-Sardega line)

    medium

    Originally planned for Sep 2023, now expected May 2026. Land acquisition and elephant corridor issues causing delays.

    Analyst expected by may 2026; delays factored in

  • Supreme Court mineral tax review pending

    medium

    Review petition pending. Jharkhand already imposed Rs 150 additional royalty on CCL coal.

    Analyst no liability booked; estimated ~rs 35,000 cr exposure. awaiting final order.

Q&A highlights

3 direct, 1 evasive
FY25 volume shortfall reasons Direct
At SECL, the main issue was abnormally heavy rainfall... in CCL also issues related to clearances, EC and FC clearances.

Explains flat FY25 volumes despite strong demand; localized issues not structural demand problem

Asked by Jyoti Singh, LIC MF

Market share vs captive mines Direct
320 million tonnes we are expecting to come from captive and commercial by FY30... we need another 30-40 million tonnes more of long term commitments.

Captive mines growing from 200MT to 320MT by FY30 but CIL has import substitution and growing non-power demand to offset

Asked by Jyoti Singh, LIC MF

875MT guidance achievability Partial
Don't you think it's too optimistic... Last three years we struggled to achieve double digit.

Analyst skepticism on 15% growth target; management acknowledges challenges but points to infrastructure improvements and demand availability

Asked by Arjit Dutta

Wage revision impact Evasive
Let the wage revision should be finalized. Based on that, Board will take the final call how much cost is to be revised.

Wage revision due Jun 2026 could significantly impact costs; management non-committal on FSA price hikes to offset

Asked by Basant Joshi

E-auction pricing outlook Direct
When coal was available in plenty, then also we had 35-40% premiums... 30-40 is the guidance.

E-auction premiums stable despite coal abundance; structural floor around 30-40% excluding abnormal years

Asked by Participant

1 min read 4 chapters

Detailed narrative

Volume Growth Story: Ambitious but Uncertain

FY25 was essentially flat due to SECL rainfall issues and CCL clearance delays. FY26 guidance of 875MT implies ~15% growth - ambitious given CIL has struggled with double-digit growth for 3 years. Management points to improving FMC infrastructure (87 rakes/day already vs 73 last year), demand availability in SECL/CCL catchments, and import substitution as drivers. The offtake target exceeds production target by 25MT, indicating stock liquidation intent.

Market Share Defense Against Captive Mines

Captive/commercial mines produced ~198MT in FY25, expected to reach 320MT by FY30. CIL's counter-strategy: grow non-power long-term linkages (90→115MT, targeting more), substitute imports (60-100MT opportunity), and extend linkage tenure from 5 to 10 years. New Shakti scheme provides nomination-based linkages for power sector. CIL projects production plateau around 1BT by FY29.

E-auction and Pricing Dynamics

E-auction premiums at ~40% in Q4 FY25, with long-term guidance of 30-40%. Booking rates declining from 98% (FY23) to 63% (FY25) as market loosens. CIL allowing subsidiaries to offer up to 40% of monthly production in e-auctions (vs 10-20% policy range) to liquidate stocks. Bridge linkage at fixed 40% premium. Import coal prices remain the anchor for e-auction pricing.

Capex and Diversification

Rs 80,000 Cr capex over 4-5 years covering coal gasification (~Rs 37-38K Cr), thermal power (~Rs 15K Cr), and regular mine capex (~Rs 20K Cr/year). Coal gasification (Sonepur Bazari with BHEL JV) still in bidding stage. Coking coal washeries in pipeline at BCCL. DVC JV for power under discussion. Critical minerals not yet included in capex plan.

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