Coal India shares fall 4% weighed by weak operating performance

Coal India shares experienced a 4% drop on Tuesday following the company's Q1FY27 results, as brokerages highlighted weak operating performance, elevated costs, and lower-than-anticipated realisations. The stock closed at ₹410.15 on the NSE, down 4.06% from the previous close of ₹427.50. Despite a slight year-over-year increase in consolidated net profit by 0.7% to ₹8,849.81 crore, the state-run coal giant saw a sharp rise in total income and expenditure, both increasing by around 8% and 12% year-over-year, respectively.

Jefferies maintained a buy rating on Coal India with a target price of ₹500, attributing potential recovery in power demand, possibly further stimulated by a weak monsoon, to bolster Coal India's volumes in FY27. Citi, on the other hand, kept a neutral rating but reduced its target price from ₹440 to ₹430, expressing muted volume trends and limited upside in e-auction prices due to existing inventory in the system.

JPMorgan also kept a neutral recommendation with a target price of ₹430, citing below-estimate Q1FY27 adjusted EBITDA and potential downside risks for international coal prices. Morgan Stanley, meanwhile, kept an equal-weight recommendation, lowering its EBITDA estimates and stating that valuations appear attractive, but the stock lacks any re-rating triggers.