Coal India Q3 Profit Falls 16% to Rs 7,166 Crore, Declares Rs 5.50 Dividend

Introduction

State-owned Coal India Limited (CIL) announced its financial results for the third quarter ending December 31, 2025, revealing a significant year-on-year decline in profitability. The company reported a 16% drop in its consolidated net profit. Despite the weaker earnings, the board approved a third interim dividend for the financial year 2025-26, maintaining its track record of shareholder payouts.

Q3 Financial Performance

For the October-December 2025 quarter, Coal India's consolidated net profit stood at Rs 7,166 crore, a 16% decrease from the Rs 8,506 crore reported in the same period of the previous fiscal year. The decline in profit was primarily driven by lower sales and a marginal increase in operational expenditures.

Revenue from operations for the quarter fell by 5.3% to Rs 34,924 crore, compared to Rs 36,859 crore in Q3 FY25. The company's total income, which includes other income sources, was recorded at Rs 37,316 crore for the quarter.

Operational Metrics and Margins

Coal India's earnings before interest, taxes, depreciation, and amortization (EBITDA) saw a notable contraction, falling by 24.2% year-on-year to Rs 9,331 crore from Rs 12,318 crore. Consequently, the EBITDA margin narrowed sharply to 26.7% from 33.4% in the corresponding quarter of the previous year. Total expenses for the quarter rose slightly to Rs 28,132 crore from Rs 27,280 crore, indicating that cost control measures were not sufficient to offset the impact of reduced revenue.

Third Interim Dividend Declared

In a positive development for investors, the Board of Directors declared a third interim dividend of Rs 5.50 per equity share, on a face value of Rs 10 per share. The company has fixed Wednesday, February 18, 2026, as the record date to determine shareholder eligibility for the dividend payment. The dividend amount is scheduled to be paid to eligible shareholders on or before March 13, 2026. CIL reiterated that dividend payments will be made exclusively through RBI-approved electronic modes, and shareholders are advised to update their KYC details.

Performance for Nine Months (YTD)

For the nine-month period ending December 31, 2025, Coal India's consolidated revenue from operations was just over Rs 1 lakh crore. The net profit for this period stood at Rs 20,163 crore, a decline from the Rs 25,709 crore earned in the same period of the previous year. The basic Earnings Per Share (EPS) for the nine months was Rs 32.87.

On the production front, the company produced 531.9 million tonnes (MT) of coal in the first nine months of FY26, slightly lower than the 543.36 MT produced in the corresponding period last year. Coal offtake also saw a minor dip to 545.5 MT from 551.68 MT.

Auditor's Report and Compliance

The statutory auditors' limited review report highlighted a few matters of emphasis. This included the accounting impact of an upgradation of executive pay scales, estimated at a consolidated Rs 2,201 crore. The report also noted the ongoing accounting policy for stripping activity costs and the notification of four new Labour Codes by the Ministry of Labour and Employment, for which no material liability is currently anticipated.

Market Reaction

Following the announcement of the quarterly results, Coal India's stock experienced a modest decline. On the day of the results, the share price on the BSE closed 0.93% lower at Rs 419.10 per share, in a market where the benchmark Sensex also saw a decline.

Conclusion

Coal India's third-quarter performance reflects a challenging operational environment marked by lower sales and margin pressure. The 16% drop in net profit underscores these headwinds. However, the company's decision to declare a substantial interim dividend of Rs 5.50 per share signals continued commitment to returning value to its shareholders. Investors will be watching for improvements in sales volume and cost management in the upcoming quarters.