Coal India Q1 Results Preview: Net Profit Likely To Drop 24%, Analysts See ‘Value Trap’
Coal India, the world’s largest state-run coal producer, is set to announce its April-June quarter results for fiscal 2025-26 (Q1FY26) on Wednesday, July 30. Street estimates suggest that the company is likely to report muted earnings growth in the first quarter of the current fiscal.
According to Bloomberg estimates, Coal India’s net profit will likely fall 24% to Rs 8,422 crore in the June quarter, compared to Rs 10,943.5 crore in the corresponding period last year. The coal miner’s topline (revenue from operations) may drop to Rs 35,011 crore in the first quarter, compared to Rs 36,464.6 crore in the year-ago period.
Why Analysts Are Bearish on Coal India Stock
Domestic brokerage Choice Institutional Equities initiated coverage on Coal India with a ‘sell’ rating at a target price of Rs 290 and an expected share price return of 25%. Choice Broking said the PSU stock is a value trap as it trades at cheap valuation multiples, which may make the stock look ‘attractive’. The base case scenario is Rs 290/share with an upside of 10-15%. The downside scenario is Rs 225/share with a 10-15% probability.
Coal India’s dividend yield is ~7%, which is optically high, but unattractive in the absence of other value drivers and does not cover equity of ~13%. ‘Coal India’s mined product’s gross calorific value (GCV) has been on a downward trend over the last 10 years, which straight away impacts realisations and profitability,’ said the brokerage.
What to Expect From Q1 Results
The company has scheduled a meeting of its Board of Directors on Thursday, July 31, to consider and approve the unaudited standalone and consolidated financial results for the quarter ended June 2025. In addition, the Board may also consider and declare the first interim dividend, if any, for the financial year 2025-26.
Coal India shares have declined by 1.84% in the last five trading sessions. The stock has fallen 2.13% in the last one month. In the last six months, the stock has gained 1.09%. On a year-to-date basis, the PSU stock has declined 0.72%, while sliding 25.10% in the last one year.
The trading window to deal in the securities of Coal India remains closed from July 1, 2025, in compliance with SEBI guidelines to prevent insider trading. The trading window will reopen on August 4. The restrictions apply to designated persons and their immediate relatives.
Conclusion
Coal India’s Q1 results are likely to be impacted by operational inefficiencies, which have weighed on the company’s profit. Analysts are bearish on the stock, citing its valuation multiples and declining profitability. However, the stock may still attract value investors who are willing to take a contrarian view.