Coal India Limited (CIL)
Know the Company
Coal India Limited (CIL) is the second-largest coal-mining company in the world and a ‘Maharatna’ enterprises under the Ministry of Coal, Government of India. Established in 1975, CIL manages India’s extensive coal mining operations, contributing almost 78% of the nation’s coal production. The company operates through eight subsidiaries across eight states, comprising 84 mining areas. CIL also has a dedicated mine planning and consultancy division.
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CIL’s core business revolves around mining and selling coal to industries such as power, steel, and cement. Specializing in thermal and coking coal, the company supports critical energy and manufacturing sectors. With a focus on sustainability, CIL engages in coal beneficiation and environmental management. Through its robust portfolio and consulting services, Coal India Limited remains integral to India’s industrial and energy landscape.
CIL’s subsidiaries are: Eastern Coalfields Limited (ECL) operates in West Bengal and Jharkhand, while Bharat Coking Coal Limited (BCCL) serves metallurgical industries from the Jharia coalfields. Central Coalfields Limited (CCL) in Jharkhand supplies coal to thermal power plants and industries, whereas Western Coalfields Limited (WCL) focuses on non-coking coal in Maharashtra and Madhya Pradesh. South Eastern Coalfields Limited (SECL) in Chhattisgarh and Madhya Pradesh is the largest production subsidiary, supplying coal to sectors like power, steel, and cement. Northern Coalfields Limited (NCL) specializes in open-cast mining in Madhya Pradesh and caters primarily to Northern power plants. Mahanadi Coalfields Limited (MCL), based in Odisha, plays a key role in coal supply to Eastern and Southern India. Additionally, the Central Mine Planning and Design Institute Limited (CMPDIL) provides consultancy services for scientific coal exploration and development.
Strengths
Coal India Limited holds a legacy spanning nearly five decades in powering India’s industrial and economic development. Established to manage coal mining operations across India, CIL has grown into the world’s second-largest coal producer and the critical player in ensuring India’s energy security. The company commands approximately 48% of India’s proven coal reserves and produces around 78% of the country’s total coal output, contributing significantly to the nation’s energy mix.
CIL is continuously scaling its production to meet the rising energy demands of the growing domestic economy. For the April–November period of the current financial year, the company achieved 471 million tonnes (MT) of coal production, marking a 2.4% year-over-year increase. CIL has set ambitious targets, including achieving 1 billion tonnes of coal production by FY26.
Despite the increasing push for renewable energy, coal remains the cornerstone of India’s energy matrix, because, approximately 49% of the country’s installed power capacity is based on thermal plants. In addition to thermal power generation, coal is essential for industries such as steel, cement, and chemicals. CIL is well-positioned to cater to this demand while embracing cleaner technologies like coal beneficiation, which enhances coal quality and reduces environmental impact.
To ensure seamless coal evacuation for its expanding operations, CIL is investing heavily in infrastructure development. The company has committed an investment of Rs 20,000 crore to enhance rail connectivity through collaborations with Rail public sector undertakings and state governments. This effort will add approximately 365 million tonnes per annum (MTPA) of coal evacuation capacity by August 2026. Furthermore, an additional Rs 5,500 crore is being invested in First Mile Connectivity projects to modernize coal handling and transportation.
CIL is venturing into innovative projects like coal gasification, which aligns with India’s National Gasification Mission and the Atmanirbhar Bharat Abhiyaan. In partnership with Bharat Petroleum Corporation Limited (BPCL), CIL is developing a Rs 12,214 crore coal-to-synthetic natural gas (SNG) project in the Majri area of Western Coalfields Limited. This project aims to produce 633.6 million Nm³ of SNG annually, reducing India’s dependence on imported liquefied natural gas (LNG) and fostering energy self-reliance.
Eastern Coalfields Limited in last month increased coal prices in Jharkhand’s Rajmahal area, which expected to add Rs 300 crore to its revenue. Normally company doing price hikes periodically to sustain its margins.
Even though renewable energy sources are gaining traction, coal is expected to remain a significant part of India’s energy mix in the short to medium term. The demand for power, driven by rapid urbanization, economic growth, and population expansion, continues to rely on coal. Furthermore, sectors such as steel and cement, where alternatives are not yet viable, underscore coal’s indispensability, where CIL has a key role.
CIL’s focus on efficient and sustainable coal production ensures that it remains a cornerstone of India’s energy security. Through innovation, infrastructure development, and sustainable practices, the company is not only meeting the nation’s current energy needs but also preparing for a greener and self-reliant future.
To offset fossil fuel dependence, the company is setting up 3,000 MW solar power projects, aligning with India’s commitment to sustainable growth. By the FY2026, the Company aims to becoming a net-zero energy company. With ambitious production targets, investment in solar energy, and transformative projects like coal gasification, CIL continues to fuel India’s growth story while embracing its responsibility towards sustainability.
In the last financial year CIL achieved its highest-ever capital expenditure (CAPEX) of Rs 23,475 crore, as against a targeted Capex of Rs 16500 crore, to strengthening core operations and advancing growth projects. This record-breaking CAPEX is a cornerstone of its strategy to maintain a robust asset base, ensuring sustained operational capacity and enabling future project opportunities. This significant achievement reflects its dedication to driving operational excellence and long-term growth.
CIL’s reward to its shareholders is also amazing. In CY 2024, till this time, the Company declared a dividend of Rs 26 per share, which considers one of the highest and consistent dividend yield.
Financials
Coal India reported a 22% drop in net profit for Q2 FY2024-25, amounting to Rs 6,289 crore, compared to Rs 8,049 crore in the same quarter of the previous financial year. The company’s revenue from operations for the said period decreased by 6.4% to Rs 30,673 crore, down from Rs 32,776 crore in the corresponding period of the prior fiscal. At the operating level, EBITDA declined by 14.2% to Rs 8,617 crore, compared to Rs 10,038.2 crore in the year-ago period. This decline reflects challenging economic conditions and lower operational performance during the quarter.
Outlook
Coal India continues to play a strategic role in meeting India’s growing energy needs as the economy expands, with all sectors contributing to the country’s growth momentum. In the absence of cost-effective and sustainable alternatives, coal is expected to remain the dominant source in India’s energy mix in the medium term, offering reliable and affordable supply.
For the current financial year, CIL has set an ambitious coal supply target of 838 million tonnes (MT), marking an 8% increase over the previous year’s achievement. Up to November, the company achieved almost 54% of its targeted production.
Approximately 80% of the Company’s production is projected to be consumed by the power sector, aligning with the Government of India’s vision for 24×7 power supply to every household. CIL has also laid out a roadmap to achieve 1 billion tonnes (Bt) of coal production to support the nation’s energy goals. India’s total power generation, including renewable energy sources, grew by 7% in the last fiscal, while, Coal-based power generation rose to 10% during the same period.
To explore alternative uses of domestic coal, CIL plans to expand its supply of coking coal for the steel sector and support upcoming coal gasification projects. Looking ahead, CIL’s long-term production is expected to peak at 1,300 MT per annum by 2034-35, with 1 Bt of production required annually until 2047 ( as per the Company’s estimate- source AR). India’s estimated coal reserves of 378.21 billion tonnes, spread across 69 coalfields, ensure sufficient availability for the foreseeable future.
Challenges
As a government-owned enterprise, CIL operates in a highly regulated environment. So, Government policies on changes in coal pricing, allocation, or distribution policies could significantly affect operations and profitability of the Company. Apart from this, stricter norms on carbon emissions, mining practices, and land rehabilitation may increase costs or limit production capacity. Opposition from local communities regarding land acquisition, displacement, and environmental impact may delay projects or lead to legal challenges.
The rapid adoption of renewable energy technologies like solar, wind and green hydrogen could alter the energy mix, in future and it may reduce coal demand.
Sector: Oil, Gas & Consumable Fuels
Market Price: Rs. 416.85 as on today
FV: Rs 10/-
Stock Name: Coal India Ltd
BSE Code: 533278, NSE Code: COALINDIA
Market Cap.: Rs 256800 Cr
Book Value: Rs. 156
Segment: Consumable Fuels
Incorporation: 1975
Headquarters: Kolkata, India
