Coal India Limited (NSE: COALINDIA) shares jump ~3% on December 24 touching a seven-month high, after the board granted in-principle approval to list two subsidiaries Mahanadi Coalfields Limited (MCL) and Southeastern Coalfields Limited (SECL). The stock extended gains for a sixth consecutive session, indicating sustained market interest following the announcement. The proposed listings remain subject to regulatory approvals and align with broader disinvestment guidance over the coming years.

MCL and SECL account for a significant portion of Coal India’s coal production and reserves. Their scale and operational footprint position them as key contributors within the group. The move is expected to bring clearer subsidiary-level disclosure and sharper operational segmentation, though timelines and valuation outcomes remain contingent on regulatory processes.

Q2 FY26: Earnings Under Pressure
Coal India reported weaker financial performance in Q2 FY26 compared with the previous quarter. Revenue declined to ₹30,187 crore from ₹35,842 crore in Q1 FY26. Operating profit fell to ₹6,716 crore, while operating margin narrowed sharply to 22% from 35%, reflecting pricing and cost-related pressures.

Net profit dropped to ₹4,263 crore versus ₹8,734 crore in the preceding quarter. Earnings per share moderated to ₹7.07 from ₹14.19, indicating a broad-based sequential slowdown across profitability metrics during the quarter.

H1 FY26: Volumes Ease, Costs Rise
For H1 FY26, Coal India reported a mixed operational and financial performance. Coal production declined 3% year-on-year to 357.08 MT, while coal offtake also fell 3% to 329.14 MT. Overburden removal decreased 3% to 855.78 million cubic metres, pointing to moderated mining activity across subsidiaries.

Inventory levels reduced to 78.70 MT as of September 30, 2025, marking a 27% decline from March-end and contributing to improved working capital positioning.

Strategic and Non-Coal Developments
During the period, Coal India progressed on diversification initiatives, including revenue-sharing mining models, renewable energy plans such as a 500 MW solar project, and incorporation of a renewable subsidiary in Rajasthan. The company also received its maiden dividend of ₹404.37 crore from joint venture HURL, reflecting incremental non-coal income contribution.

Technical Analysis

Coal India is trading at ₹399.45, consolidating below the ₹408–410 resistance zone. The stock remains above its 50-day EMA (~₹385), keeping the short-term trend constructive. RSI near 67 signals strong momentum but hints at near-term consolidation. Support lies at ₹340–367, while a sustained move above ₹416 could trigger further upside.

Conclusion
Coal India’s near-term sentiment is supported by the proposed subsidiary listings and a constructive technical setup. However, earnings pressure, softer volumes, and margin compression temper the outlook. Sustained upside will depend on regulatory clarity, operational recovery, and a decisive breakout above key resistance levels.

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