Coal India Emerges Nifty's Top Loser, Slides Over 5% on Cost Pressures

Shares of Coal India declined sharply on Friday, falling 4.7% to ₹432, emerging as the top loser on the Nifty 50, even as the broader market traded in the green.

The decline comes after the company indicated that it is absorbing a sharp rise in input costs while keeping coal prices affordable for consumers, raising concerns over margin pressures.

Coal India highlighted a steep increase in key input costs, with explosives prices rising 44% to ₹72,750 per metric tonne and industrial diesel prices surging 54% to ₹142 per litre. Despite these increases, the company has chosen not to fully pass on the cost burden to customers.

The company said the cost of ammonium nitrate (AN), a key component used in explosives and accounting for about 60% of their composition, has risen significantly from pre-war levels of ₹50,500 per metric tonne to ₹72,750 per metric tonne as of April 1, 2026.

Cost Pressures Rise As Company Shields Consumers

The surge in AN prices has directly pushed up the cost of explosives used in mining operations. The average cost of explosives increased around 26%, from ₹39,588 per metric tonne in February 2026 to ₹49,783 per metric tonne by March-end.

Diesel prices have also risen sharply, with industrial diesel costs increasing from ₹92 per litre in mid-March to ₹142 per litre as of April 1, 2026. Coal India said it is compensating contractors operating in its mines for higher diesel costs, adding to its overall cost burden.

Despite these pressures, the company has adopted a pricing strategy aimed at insulating consumers. It has reduced coal reserve prices in single-window, mode-agnostic e-auctions to ensure affordability and prevent a cascading impact on downstream industries.

However, this move has weighed on investor sentiment, as the market factors in potential margin compression due to cost absorption.