Coal India margin falls as costs outpace 29.05% revenue growth
Operating margin slipped to 26.09% sequentially, while other income remained 19.46% of pre-tax profit and kept net profit growth modest.
Filed 27 Jul 2026, 17:49 IST · after market close · Coal India Ltd (COALINDIA)
Key takeaways
- Operating margin fell 8.84 percentage points year on year to 26.09% as expenses grew 46.59% against 29.05% revenue growth.
- Net profit rose only 1.32% year on year to Rs 8,849.81 cr despite a 3.62% decline in operating profit, helped by a 0.92 percentage-point lower tax rate.
- The stock fell 4.06% after the consolidated results, a larger move than its 2.43% median absolute reaction over the past eight results.
Price around the results
Revenue held up, but operating profit weakened
Coal India's consolidated revenue was broadly flat sequentially, down 0.51%, but operating profit fell 4.77% because expenses rose 1.09%. Year on year, revenue increased 29.05%, yet operating profit declined 3.62% as costs grew 46.59%. Net profit was nearly flat year on year, rising 1.32%, but fell 18.87% sequentially.
Cost growth drove the margin squeeze
Operating margin narrowed 1.17 percentage points sequentially and 8.84 percentage points year on year because expenses grew faster than revenue in both comparisons. Interest expense rose 23.45% year on year, adding to the pressure, although it declined 4.74% sequentially. Other income accounted for 19.46% of pre-tax profit, so reported earnings had a meaningful non-operating contribution; the lower year-on-year tax rate also supported net profit.
Margin recovered from the trough but slipped again
The 26.09% operating margin was above the 22.25% recorded in Q2FY26, but below 26.72% in Q3FY26, 27.26% in Q4FY26 and 34.93% in Q1FY26. This marks a sequential decline after two quarters of margin improvement. Coal India's margin was still 10.74 percentage points above the 15.35% median for the 17 Energy peers that had reported the quarter.
Market reaction was negative and larger than usual
The results were filed after market close, and the stock fell 4.06% on the next trading session, with volume at 2.91 times its usual level. It was down 4.08% by the following session and 2.32% after five sessions. The direction was consistent with the stock's history, where five of the past eight results were followed by declines, but the initial fall exceeded the 2.43% median absolute move.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹46,255 cr | ₹46,490 cr | -0.51% | +29.05% |
| Other income | ₹2,281 cr | ₹5,244 cr | -56.50% | +29.58% |
| Expenses | ₹34,186 cr | ₹33,817 cr | +1.09% | +46.59% |
| Operating profit | ₹12,069 cr | ₹12,673 cr | -4.77% | -3.62% |
| Operating margin (%) | 26.09% | 27.26% | — | — |
| Interest | ₹327 cr | ₹344 cr | -4.74% | +23.45% |
| Depreciation | ₹2,303 cr | ₹2,947 cr | -21.85% | -0.20% |
| Profit before tax | ₹11,719 cr | ₹14,627 cr | -19.88% | +0.09% |
| Tax | ₹2,870 cr | ₹3,719 cr | -22.84% | -3.54% |
| Net profit | ₹8,850 cr | ₹10,908 cr | -18.87% | +1.32% |
| EPS (₹) | ₹14.36 | ₹17.59 | -18.36% | +1.20% |
Operating margin of 26.09% compares with a Energy sector median of 15.35% across 17 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.06% | -4.01% |
| Next session | -4.08% | — |
| 5 sessions | -2.32% | -4.90% |
Volume on the results session was 2.91× its 20-day average.
What to watch
- Whether operating margin recovers from 26.09% after the sequential decline of 1.17 percentage points.
- Whether expense growth moderates from 46.59% year on year against revenue growth of 29.05%.
- Whether other income remains near 19.46% of pre-tax profit.