Coal India Ltd. posted a record quarterly profit that beat estimates as buyers of the fossil fuel boosted stockpiles before the summer demand season.
Coal use in India, the world’s No. 3 polluter, is climbing as power consumption grows and Prime Minister Narendra Modi’s government prioritizes domestic fuel sources to bolster energy security. Plans to add 88 gigawatts of new power plants by 2032 will lift India’s current coal power capacity by more than a third.
Profit for the three months ended December jumped 17% from a year earlier to 90.7 billion rupees ($1.1 billion), the state-run miner said in a filing Monday. Earnings beat the average estimates of 77.4 billion rupees compiled by Bloomberg.
Coal India’s shares have more than doubled in the past year on bumper earnings, even as the producer increased spending to add mines and infrastructure. Shipments during the quarter rose almost 9% from a year earlier, offsetting a 6% decline in average prices.
Coal produces about 70% of India’s electricity and also fuels several heavy industries, such as steel, cement and aluminum. Demand should rise about 3.5% a year through 2026, according to the International Energy Agency.
Shortages of the material in the past two years affected power station inventories, causing blackouts across the country. Coal India is under pressure to help prevent similar shortages as the nation heads for a national election this year.