Coal India’s (CIL’s) coal production fell 7.5 per cent year-on-year (Y-o-Y) during the quarter ended June, marking one of the steepest quarterly declines for the state-owned miner, as the company accelerated its transition from a production-led growth strategy to a demand-driven model aimed at reducing excess inventories and improving supply-chain efficiency.
The company, which accounts for around 80 per cent of India’s domestic coal output, produced 169.6 million tonnes (mt) of coal during the first quarter (April-June/Q1) of 2026-27 (FY27), down from 183.4 mt in the corresponding period last year, according to provisional production data. June production was largely flat at 57.4 mt, compared with 57.8 mt a year earlier.
Despite lower output, CIL increased total coal supplies by 3.5 per cent to 197.7 mt during Q1, from 191 mt in the year-ago period. Supplies during June alone rose 7.5 per cent to 65.8 mt from 61.2 mt a year earlier.
The higher dispatches enabled the miner to liquidate 28.3 mt of pithead coal stocks during the quarter, reflecting what the company described as a conscious shift towards “demand-synchronised mining and inventory optimisation”.
Business Standard reported in May that CIL is pursuing an aggressive strategy to reduce inventories as the company targets coal production of 815 mt and supplies of 850 mt during FY27. The company indicated that while output growth may remain calibrated, meeting customer demand and reducing inventories will remain central to its operating strategy.
“While the supply target is higher at 850 mt, efficiency will now be measured not only in terms of production but also supplies and dispatches. If we produce 815 mt and supply 850 mt, inventory could reduce by around 35 mt to 95 mt by the end of FY27,” CIL Chairman and Managing Director B Sairam told Business Standard in an interview.
He said the company began FY27 with around 130 mt of coal stock at its pitheads. “Over time, we aim to reduce inventory to more optimal levels of around 50 mt for operational flexibility,” he said.
“The reduction in pithead stock during the quarter was a conscious business decision aimed at improving inventory turnover, reducing carrying costs, and enhancing supply chain efficiency,” CIL said in an exchange filing. The company added that the move marks “a shift from a purely volume-driven approach to a value-driven and demand-responsive operating model”, to meet customer requirements while systematically reducing excess inventory accumulated over previous years.
This year, CIL’s production target has been set after evaluating anticipated demand from both the power and non-power sectors. Coal supplies to the power sector, the company’s largest consumer segment, rose 1.8 per cent Y-o-Y to 154.75 mt during Q1. Supplies to the non-regulated sector grew faster, increasing by 10 per cent to 43.1 mt during the period, indicating stronger dispatches across customer segments.
The company also reported a 23 per cent increase in coal movement through its first-mile connectivity infrastructure during the quarter, with volumes rising to 66.76 mt, as it continued to invest in evacuation infrastructure to improve logistics and operational efficiency.
