Whalesbook
Gujarat Solar Plant Now Operational
Coal India Limited (CIL) has activated its 100 MW solar power project in Gujarat, a step in its renewable energy push. This project adds to CIL's growing renewable energy portfolio. CIL has received the commissioning certificate for the 100 MW solar plant in Gujarat, with the certificate effective March 31, 2026. The company is spending significantly on solar, with capital expenditure reaching ₹961 crore by January FY26—a 2.33 times year-on-year jump and exceeding its annual target. The cost per MW for solar projects has fallen to around ₹4-4.5 crore, improving project economics. CIL's stock trades around ₹479.95 with a market cap of ₹2.96 trillion and a P/E of 9.51. The stock has gained 24.86% over the past year.
CAG Report Details Major Target Shortfalls
This development comes as the Comptroller and Auditor General (CAG) scrutinizes CIL's progress. A December 2025 report highlighted CIL's failure to meet its target of developing 3,000 MW of solar capacity by 2024, a goal set in 2017. By December 31, 2024, only 122.49 MW had been installed, representing just 4.08% of the goal. The CAG has urged CIL to speed up execution, noting that projects are now delayed until 2027–28. This criticism highlights execution challenges for CIL, a company heavily reliant on coal.
CIL's Renewable Ambitions and Valuation
CIL's P/E ratio of about 9.5 is lower than the minerals and mining industry average of 10.96, suggesting a valuation discount. However, its role in India's growing renewable energy sector presents opportunities and competition. Peers like Adani Green Energy (PE 104.06) and NTPC (PE 14.80) have higher P/E multiples, reflecting different market views on pure renewable energy companies. Despite slow progress on its solar targets, CIL has formed joint ventures with NTPC and NLC India. The company aims for 3 GW of solar capacity by FY28 and 9.5 GW by 2029-30. CIL's stock has shown strong momentum, outperforming the broader market over the past year.
Questions Over Transition Pace
The low achievement rate of 4.08% against the 3,000 MW solar target, combined with project delays extending to 2027-28, raises questions about CIL's transition pace. The CAG's calls for faster execution and concerns about meeting Net Zero commitments add pressure. A proposal to delist its subsidiary, CIL Solar PV Limited, suggests possible internal restructuring within its renewable division. Analyst sentiment is mixed, with ratings often around "Neutral" or "Hold" and price targets indicating limited short-term upside.
Balancing Coal and Renewables
Coal India remains a dominant player in India's energy mix, producing 80% of domestic coal. While renewable investments are growing, the vast scale of its coal operations means the transition will be a multi-year, complex undertaking. CIL has set ambitious targets for renewable capacity by the end of the decade, backed by significant capital expenditure and partnerships. However, its success in executing these plans, managing regulatory issues, and balancing its fossil fuel business with clean energy aspirations will shape its future role and valuation in India's energy landscape.