Coal India shares rose 6% so far this year and traded 0.6% higher at ₹424.75 on Friday, September 25, as brokerage firms maintain bullish outlooks on the stock. The stock has recovered almost all losses following its soft June quarter (Q1FY27) performance, with Coal India's higher e-auction premiums and tighter coal inventories supporting realizations. The recovery gained momentum after global brokerage firms Morgan Stanley and Jefferies issued upgrades, with Morgan Stanley upgrading to 'Overweight' and raising its target price to ₹480 from ₹420, while Jefferies maintained a 'buy' recommendation with a ₹500 target price, implying significant upside potential from current levels.
Global brokerage firm Morgan Stanley has upgraded Coal India Ltd. to 'Overweight' and raised its price target to ₹480 per share, as reported by CNBC TV18. The target implies a potential upside of 16% from the stock's previous closing level. Jefferies has maintained its 'buy' recommendation with an even more ambitious ₹500 target price, representing an 18.5% upside from current levels. At 6.6x one-year-forward P/E, Coal India's stock is trading around its long-term average, with Morgan Stanley expecting this multiple to sustain on the back of strong earnings upgrades. The brokerages expect these factors to result in significant earnings upgrades for the state-run miner, which could provide a further catalyst for Coal India stock price over the coming months.
According to Jefferies, the upgrade is driven by expectations of accelerating thermal power demand, with power demand growth accelerating from 1% in FY26 to 9% in April-August this year. The brokerage estimates factor in a 5% compound annual growth rate in Coal India's dispatch volumes over FY26-29. Jefferies believes that after Coal India's Earnings Per Share (EPS) declined by 12% over FY24-26, it can improve by a 6% CAGR over FY26-29. The brokerage has estimated e-auction prices to be between ₹3,000 to ₹3,200 over FY27-29, supported by higher global coal prices. As per NDTV Profit, Fort Capital's Parag Thakkar highlighted that Coal India shares are currently trading at around 8 times earnings, while offering a dividend yield of nearly 6%.
On a consolidated basis, Coal India's net profit rose 0.63% to ₹8,852.11 crore while net sales rose 7.77% to ₹46,254.80 crore in Q1 June 2026 over Q1 June 2025, as reported by Business Standard. The company's revenue was up 7.8% in the June quarter at ₹46,254.8 crore from ₹42,919.2 crore last fiscal. However, earnings before interest, taxes, depreciation and amortization (EBITDA) declined 4.1% to ₹12,069 crore from ₹12,588 crore and margin contracted to 26.1% from 29.3% in the year-ago period. The company also declared an interim dividend of ₹5.5 per share for FY26-27. Coal India is India's largest coal producer and a Maharatna public sector undertaking, primarily engaged in coal mining and production, supplying coal to power, steel, cement, fertilizer and other industrial sectors. The Government of India held 61.13% stake in the company as on June 2026.
According to the provisional business update shared earlier this month, Coal India's e-auction premium indicated 59% growth from the comparable period. For the April-August 2026 period, e-auction premiums are up 46%, compared with 35% during April-August 2025. Coal stocks at power plants have dropped to just seven days compared to the last 10-year average of 15 days. There are already signs of tighter coal markets with Coal India's offtake rising to 60.6 million tonnes (MT) in August, taking fiscal year 2027 (FY27) year-to-date offtake to 323 MT, against its full-year target of 850 MT. A total of 26 analysts have coverage on the Coal India stock, with 16 having 'buy' recommendations, while five have 'hold' and 'sell' ratings each. The proposed initial public offering of subsidiary Mahanadi Coalfields Ltd adds another variable, with Coal India planning to sell up to 10% of MCL through an offer-for-sale.
There are already signs of tighter coal markets with Coal India's offtake rising to 60.6 million tonnes (MT) in August, taking fiscal year 2027 (FY27) year-to-date offtake to 323 MT, against its full-year target of 850 MT. Coal inventories at power plants fell to around nine days at the end of August, from about 19 days in March, which could support restocking demand. India's power demand rose 13% year-on-year in August. However, this boost to profitability could prove temporary as production recovers with the retreat of the monsoon, with Coal India targeting 815 MT of production and 850 MT of offtake in FY27. The proposed initial public offering of subsidiary Mahanadi Coalfields Ltd adds another variable, with Coal India planning to sell up to 10% of MCL through an offer-for-sale. According to Jefferies, Coal India's valuations are attractive at nine times the one-year forward adjusted price-to-earnings ratio and 7% dividend yield.
