Motilal Oswal has issued a buy rating on Coal India with a target price of ₹510 in its research report dated July 27, 2026, while Prabhudas Lilladher has upgraded their recommendation to a buy rating with a target price of ₹520 in their latest report dated July 28, 2026. According to Motilal Oswal, the stock is currently trading at 4.9x on FY28E EV/EBITDA, which they consider attractive for the coal mining major. Prabhudas Lilladher values the stock at 6x FY28E EV/EBITDA with their revised target price, maintaining their bullish outlook on the company's prospects.
Coal India delivered a robust start to FY27 with power generation from coal-based thermal power plants increasing to 121.7 billion units in Q1FY27, as reported by Prabhudas Lilladher. Despite coal-based thermal capacity representing only 41% of total installed mix, it continues to command 71% market share. The company's E-auction volume reached 26.5 million tonnes, up 24.8% year-on-year, contributing approximately 13.4% to total dispatch mix. Notably, E-auction premium increased to 47% from a low of 36% in Q4FY26, indicating improved market dynamics. Total dispatches stood at 198.2 million tonnes with dispatch to power sector at approximately 80%, helping the company liquidate 28.9 million tonnes of pithead coal stock and improve inventory turnover.
The company's EBITDA per tonne stood at ₹517, declining 12% YoY and 16% QoQ, according to Motilal Oswal's analysis. This decline was attributed to higher operational expenses impacting the company's profitability metrics during the quarter. However, capex increased 16.6% YoY to ₹34 billion in Q1FY27, representing 20.6% of the FY27 target. The company continued strengthening its coal evacuation infrastructure along with procurement of Heavy Earth Moving Machinery (HEMM), which would help achieve production targets over the next few years. Prabhudas Lilladher notes that higher dispatches helped better inventory turnover, reducing carrying costs and enhancing supply chain efficiency.
On the clean energy front, Coal India commissioned a 200MW Khavda solar project and booked maiden energy-sale revenue of ₹56.8 million. As reported by Prabhudas Lilladher, the company has kept their estimates for FY27/28 largely unchanged following the in-line performance. Despite operational challenges, the brokerage maintains their buy rating with a revised target price of ₹520, citing that costs are peaking and expecting improved performance going forward. Motilal Oswal maintains its positive outlook based on the current valuation metrics and operational performance, with both brokerages highlighting the company's strong market position and infrastructure development initiatives.
