Coal India shares hit fresh record high, rise 19% in 2026 so far: What lies ahead?

Temperatures have unusually surged in India, leading to expectations of higher-than-usual power demand in the upcoming summer season. India relies on coal for three-fourths of its electricity generation, even as it ramps up renewable energy generation at a record pace.

This comes amid rising worries over LNG supply disruptions due to the raging war between Iran and Israel-US.

Temperatures soar

The World Meteorological Organization (WMO) has warned that there is a widespread signal for above-average land surface temperatures during the March-May period due to various climatic conditions.

Live Events

Fresh heatwave warnings have been issued by the India Meteorological Department (IMD) for isolated pockets in Mumbai for Friday and Saturday. The city has already witnessed three days of heatwave conditions in March so far.
Delhi is likely to see temperatures rise to 36°C today, which is above the normal level, according to the India Meteorological Department (IMD).
Heatwave conditions also persist in other parts of the country, with the weather department forecasting heatwave conditions in Gujarat and Madhya Pradesh over the next few days. Rajkot in Gujarat recorded 42°C on Tuesday, the highest so far this year.
Also Read | Silver ETFs see first outflows in 26 months. Profit booking or a cautious approach?

India has sufficient coal supplies, says government

Amid rising temperatures, power demand is expected to peak. Additionally, the Indian government earlier this week said the country has sufficient coal supplies to meet what is expected to be an unprecedented surge in demand during the summer months.

“Coal production and supply continue to be higher than consumption in the fiscal year ending March 31,” the Coal Ministry said in a statement on Wednesday.

Earlier this week, JM Financial said that Coal India’s long-term demand outlook remains intact, and the company is targeting 5% annual growth in the medium term.

“Prices (FSA and e-auction) have both stabilised post the recent run-up and are expected to remain at similar levels, excluding short-term spikes due to supply constraints. Initial trials for substitution of imported coal (40-45 MTPA requirement) with domestic coal are encouraging. The company is trying to increase supplies to non-power sector consumers like sponge iron (eastern India) and cement to increase offtake. Private commercial mining is expanding rapidly but will stabilise around 300–320 MT by FY29. Coal gasification opportunities are under exploration,” it said.

Jefferies recently raised its target price on Coal India to Rs 485 while reiterating its Buy rating, arguing that the state-run miner’s valuation remains reasonable amid an improving earnings outlook and a healthy dividend yield.

Coal India shares gained more than 1% to hit the fresh 52-week high of Rs 476 per share, before erasing all gains and slipping into the red. The stock has gained more than 19% so far this year.

(With inputs from agencies)

(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. These do not represent the views of The Economic Times)