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Coal India continued to see strong growth in both volumes and e-auction premiums, supported by higher thermal power generation, lower coal inventories at power plants and elevated imported coal prices, Nuvama Institutional Equities said. The brokerage noted that Coal India’s offtake rose 12.5% year-on-year to 61.2 million tonnes in September 2026, marking the fifth consecutive month of volume growth. Q2 FY27 and H1 FY27 volumes increased 12% and 7.6%, respectively. Factoring in higher volumes and e-auction prices, Nuvama raised its FY27/FY28 EBITDA estimates by 6%/4%. The brokerage upgraded Coal India to ‘Buy’ from ‘Hold’ and raised its target price to ₹501 from ₹454, including DPS of ₹26.5. Nuvama noted that the stock trades at around 4.1x FY28E EV/EBITDA and offers an estimated 6% dividend yield. Nuvama said strong power demand and critically low coal inventories at power plants position Coal India favourably for continued volume growth in the second half of FY27. The brokerage now factors in 7% YoY volume growth to 796 million tonnes in FY27, followed by 4.5% growth to 832 million tonnes in FY28. Coal India’s average e-auction premium over the notified price rose sharply to 94% in September from 59% in August and 34% a year earlier, Nuvama noted. The increase was driven by coal shortages in India and higher imported coal prices. The proportion of offered coal allocated through e-auctions also increased to 72% in September from 40% in H1 FY27, signalling stronger customer demand. Nuvama expects e-auction prices to remain relatively firm in Q3 FY27 amid elevated global coal prices and robust domestic demand. The brokerage has raised its FY27 average e-auction premium assumption to 60% from 51%, while estimating premiums of 60% and 49% for FY27 and FY28, respectively, compared with 42% in FY26. Nuvama also highlighted the proposed listing of Coal India’s subsidiary Mahanadi Coalfields Ltd (MCL) as a potential value-unlocking trigger. MCL accounted for around 28% of Coal India’s total volume and 31% of EBITDA, excluding overburden removal, in FY26, according to the brokerage. Nuvama expects MCL to command a valuation of more than 6x EV/EBITDA, supported by its stronger margins and return ratios. It added that the listing could also create scope for a valuation re-rating of Coal India, which currently trades at 4.1x FY28E EV/EBITDA, below its three-year average of 5.1x. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions. Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content. Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
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