Coal India Q1 profit stays flat as rising input costs erode 8% revenue gain; board declares Rs 5.50 interim dividend

New Delhi: Coal India Limited's (CIL) consolidated revenue from operations rose about 8 percent year-on-year to Rs 46,255 crore in the June quarter (Q1 FY2026-27), but the gain did not carry to the bottom line: consolidated profit before tax edged down 0.5 percent to Rs 11,719 crore, and profit after tax was near flat at Rs 8,850 crore, up 0.7 percent. Total expenditure climbed 12 percent to Rs 36,816 crore, outpacing revenue, as the costs of explosives, fuel, outsourcing and levies rose. This quarter also captured the full impact of the West Asia crisis which bumped up the prices of bulk diesel and ammonium nitrate, a mining explosive.

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The board has declared an interim dividend of Rs 5.50 per share for FY2026-27 and set July 31 as the record date.

Costs outpaced revenue

Consolidated total income rose 8 percent to Rs 48,295 crore, but the 12 percent jump in expenditure meant operating profitability weakened. EBITDA was flat year-on-year at about Rs 14,349 crore against Rs 14,348 crore, and the EBITDA margin on revenue from operations fell to 31 percent from 33 percent, which the company described as a slight moderation. Profit before Tax, excluding the share of joint-venture profit, fell 1 percent to Rs 11,479 crore; a 67 percent rise in JV profit to Rs 240 crore narrowed the reported pre-tax decline to 0.5 percent.

Sequentially, revenue from operations was broadly flat against the March quarter's Rs 46,490 crore, but pre-tax profit fell about 20 percent from Rs 14,627 crore and Profit after Tax about 19 percent from Rs 10,908 crore. Almost the entire quarter-on-quarter profit gap reflects other income, which was Rs 2,040 crore this quarter against Rs 5,128 crore in the March quarter.

Interim dividend of Rs 5.50 a share

The interim dividend of Rs 5.50 on a face value of Rs 10 works out to a 55 percent payout and implies a distribution of roughly Rs 3,390 crore on the company's paid-up equity of Rs 6,162.73 crore. Payment is to be made on or before August 25.

Fuel and explosives drove up the input bill

The sharpest cost pressure was in cost of materials consumed, up 27 percent to Rs 3,260 crore. The company attributed almost the entire increase to two input lines: oil and lubricant, up Rs 435 crore, and explosives, up Rs 244 crore, with the balance from HEMM, spares and timber.

Other expenses rose 14 percent to Rs 11,658 crore, which the company said was led by a Rs 1,246 crore increase in rates and taxes, tied to higher offtake and a higher Jharkhand mineral-bearing land cess, along with higher power and repair costs. Contractual expense rose 11 percent to Rs 8,658 crore, driven by Rs 784 crore of additional coal and overburden outsourcing. Finance costs rose 23 percent to Rs 327 crore. A Rs 1,418 crore swing in inventory changes, against Rs 149 crore a year earlier, also added to reported costs as coal stocks were drawn down.

Write-backs, interest and lower tax cushioned the bottom line

With operating costs rising faster than revenue, the flat headline profit rested substantially on non-operating and accounting items. Other income rose 26 percent to Rs 2,040 crore, which the company attributed to a Rs 449 crore rise in interest on deposits. A larger accounting write-back of stripping-activity provisions supported other operating income. The share of JV profit rose Rs 96 crore.

At the pre-tax level, profit still fell. Reported profit after tax rose only because the tax charge fell 4 percent to Rs 2,870 crore. Investors weighing earnings quality may note that the near-flat post-tax result was achieved despite a decline in pre-tax profit.

Production fell, offtake rose

Operationally, coal production fell about 7 percent to 169.63 million tonnes (MT), below the 190.66 MT target, with steep declines at MCL (down 18 percent), NCL (down 16 percent) and BCCL (down 27 percent), partly offset by gains at CCL (up 10 percent) and SECL (up 7 percent). Offtake, however, rose about 4 percent to 197.86 MT, so the company sold more than it mined and drew down inventory. Raw coal stock fell 22 percent from March to 101.35 MT, though it remained about 2 percent above the year-ago level. Overburden removal was broadly flat, down about 1 percent. Of production, 69 percent came from contractual (outsourced) operations, consistent with the rise in outsourcing costs.

Realisation gains leaned on e-auction and levies

Overall average realisation including other charges rose about 3 percent to Rs 2,276.62 a tonne on sales of 198.23 MT. But the picture is thinner once pass-through charges are stripped out. Excluding other charges, overall realisation was essentially flat at Rs 1,594.96 a tonne, and realisation on fuel supply agreement (FSA) coal — the regulated bulk of sales — fell about Rs 33 a tonne, which the company recorded as a Rs 555 crore drag. The genuine price gains came from e-auction, where volumes rose about 25 percent to 26.52 MT and per-tonne realisation rose. In other words, the reported top-line growth was carried by higher offtake volumes, stronger e-auction sales, and levies that inflate both revenue and cost, rather than by firmer prices on regulated coal.

Subsidiaries: BCCL slipped into loss

BCCL swung to a pre-tax loss of Rs 103 crore from a Rs 247 crore profit a year earlier, and a post-tax loss of Rs 68 crore, alongside its 27 percent production drop and 14 percent lower offtake. Among the other producers, ECL's pre-tax profit more than doubled to Rs 517 crore, CCL rose 12 percent and SECL 8 percent, while NCL fell 6 percent and WCL 14 percent. MCL's pre-tax profit was flat.

Standalone profit rose on a small base

At the standalone level — the holding company alone, whose income is dominated by dividends from subsidiaries received largely in the March quarter — revenue from operations was Rs 345 crore, down about 4 percent year-on-year, while pre-tax profit rose 20 percent to Rs 211 crore and post-tax profit 32 percent to Rs 153 crore, helped by higher other income. The standalone results included Rs 5.68 crore of revenue from the sale of energy, which the company said was recorded for the first time, from its 100 MW Bhadramali solar plant in Gujarat. The sharp sequential fall in standalone profit from the March quarter's Rs 5,534 crore reflects the timing of subsidiary dividends and is not comparable across quarters.

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Balance sheet firmed up

The debt-to-equity ratio was stable at 0.12, and book value per share rose about 7 percent to Rs 206.91 from Rs 193.26 at end-March on higher net worth. Current and quick ratios improved, which the company attributed to higher deposits. Consolidated gross trade receivables fell to Rs 15,834 crore from Rs 15,985 crore at end-March and Rs 17,356 crore a year earlier.

Project and renewables milestones

During the quarter, the company laid the foundation on June 20 for a coal-gasification project it describes as India's first commercial one, to be built by BCGCL, a CIL-BHEL joint venture, at an investment of Rs 25,000 crore with annual capacity of 6.6 lakh tonnes of ammonium nitrate. BCCL's 2.0-million-tonne Bhojudih coal washery began commercial operations on May 26, taking the subsidiary's washing capacity to 17.35 MTPA. After the quarter closed, CIL said it commissioned 200 MW of its 300 MW Khavda solar project in Gujarat on July 8.

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