India: CIL reports stable FY'25 performance amid strategic diversification push

• Revenue dipped on lower coal prices despite higher output
  
  
• CIL expanded into solar and coal-to-gas for diversification
  
  

Coal India Ltd. (CIL) reported a 1% y-o-y growth in coal production in FY'25, with output reaching 781.05 million tonnes (mnt) from 773.65 mnt in FY'24. Offtake also grew 1% to 763.06 mnt from 753.65 mnt in FY'24, reflecting stable coal demand from the power and industrial sectors.

Overburden removal (OBR) refers to the process of removing the soil, rock, and other material that lies above a coal seam or mineral deposit in an opencast mine. CIL's OBR in FY'25 increased by 3% to 2,018.20 million cubic metres.

Revenue declines on lower realisations

Despite higher volumes, net sales dropped 3% y-o-y to INR 1,26,957 crore from INR 1,30,326 in FY'24. This was due to lower average realisations of INR 1,667/t compared to INR 1,728 in FY'24. Fuel supply agreement (FSA) and e-auction sales both recorded weaker pricing.

EBITDA drops

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) dropped to INR 51,640 crore in FY'25, down from INR 51,793 in FY'24, a marginal drop of 0.29%.

Employee benefits fell by 5% y-o-y to INR 46,249 crore, and material costs dipped 3%, partially offsetting the impact of reduced revenue.

Profitability under pressure

Profit before tax (PBT) declined 4% y-o-y to INR 46,966 crore, while Profit After Tax (PAT) dropped 6% to INR 35,302 crore. Depreciation expenses rose 36% due to increased capital expenditure and impairment of stripping activity assets.

However, a 19% rise in other income, supported by interest refunds and provision reversals, provided some cushion.

Subsidiary insights

MCL remained the top contributor with a PBT of INR 14,162 crore, followed by NCL at INR 12,803 crore.

SECL saw the biggest drop in profits, down 32% in PBT and 35% in PAT. ECL, however, turned profitable y-o-y, with a 41% rise in PBT.

Central Mine Planning & Design Institute Limited (CMPDIL) also showed strong growth with a 20% rise in PBT.

Diversification beyond coal mining

CIL took concrete steps toward diversification. It commissioned a 50 megawatt (MW) solar power plant at Nigahi (NCL), the largest in its portfolio.

A new subsidiary, Coal Gas India Ltd., was incorporated with GAIL to set up a coal-to-synthetic natural gas (SNG) plant.

CIL also signed an MoU with IIT-Hyderabad to establish the (Centre of Clean Coal Energy and Net Zero) CLEANZ focused on clean coal and net-zero initiatives.

Outlook

While no formal production or sales guidance has been issued for FY'26, CIL's focus on diversification-through solar energy and coal beneficiation-signals a shift toward sustainable and value-added operations.

The company is well-positioned to support energy security, though realisation recovery will be key to margin growth in this fiscal year.