Coal India Limited increased its power sector coal supplies by 11% in the July-September quarter to 148.20 million tonnes. While this operational surge supports energy demand during the festive season, investors should note that thermal power plants continue to face inventory shortages, alongside pressure on the company's profit margins from rising operational costs.
Coal India Limited (CIL) has ramped up its logistical output to support thermal power generators, reporting an 11% increase in supply to the power sector during the second quarter of the current fiscal year. The state-owned mining giant delivered 148.20 million tonnes (MT) of coal to utility companies between July and September, up from 133.50 MT in the same period last year. In September alone, total coal supplies rose by 12.5%, moving 61.20 MT as the company focused on liquidating approximately 63 MT of its pithead stocks built up earlier in the year.
The surge in supplies comes as the Indian power sector deals with high electricity consumption and shifting seasonal patterns. To manage this, the Ministry of Power has invoked Section 11 of the Electricity Act, mandating maximum generation from all captive coal-based power plants with capacities of 50 MW or higher between October and December 2026. This move highlights the underlying pressure on energy supplies, as data shows that 82 out of 190 monitored thermal power plants were operating with critical stock levels—defined as having coal reserves below 25% of the required amount—as of late September.
While the increased supply volume is a positive operational development, the company continues to face financial challenges. Recent quarters have seen pressure on profit margins due to higher statutory levies and provisions for employee wage revisions. These cost pressures mean that the financial performance of the company does not always move in direct lockstep with production volumes. Investors should monitor whether the company can maintain these supply levels while managing the impact of these additional costs on its bottom line.
Looking ahead, Coal India has set production and supply targets of 815 MT and 850 MT respectively for the full fiscal year. The ability to meet these ambitious targets will depend on several factors, including the consistency of logistics, weather conditions affecting mining activities, and the company's ability to balance its e-auction and washed coal price realisations. The key monitorable for the coming months will be whether the increased coal supply effectively lowers the number of thermal power plants operating with critical inventory, which would indicate a successful stabilization of the energy supply chain.