Bharat Coking Coal Q2: ₹386.5 Cr Incentive Lifts Profit

Bharat Coking Coal reported a profit after tax of ₹123.74 crore for July–September 2026, against a loss of ₹52.99 crore a year earlier, on revenue from operations of ₹4,412.58 crore (up from ₹3,173.25 crore). The presentation says that revenue includes ₹386.50 crore of performance-incentive and compensation income, against none a year earlier. Without it the quarter would have shown a pre-tax loss of about ₹201 crore (our arithmetic, before any related costs). Half-year profit is lower than last year, at ₹55.65 crore against ₹123.88 crore, and half-year coal production fell 12.51%.

The quarter in numbers

The June quarter was a loss: profit/(loss) before tax of (₹103.07 crore) and after tax of (₹68.09 crore) in the 30 June 2026 column of the statement ([R]). Revenue rose 23.0% from the June quarter's ₹3,587.27 crore (our arithmetic). The company's own variance table puts the year-on-year revenue rise at 39.06%, and the half-year fall in profit before tax at 58.51% ([P]).

Not given as growth rates, because a profit cannot be measured against a loss: the quarter's profit and EBITDA against a year ago. EBITDA was 7.9% of total income in the quarter against 2.4% a year earlier (our arithmetic, from [P]), on the company's definition of profit plus tax, finance costs and depreciation, so it includes other income ([P]); the company's own half-year measure is 5.19% against 5.26% for FY26 ([P]).

What is inside the revenue

The presentation attributes the quarter's higher sales to three things: more coal sent out (8.93 million tonnes against 8.03), higher prices for washed coal (₹12,681 a tonne against ₹9,437), and "Recognition of PI and compensation of ₹386.50 Cr as against Nil during the comparitive period" ([P]). The first-half version of the same line shows ₹386.50 crore against ₹121.65 crore a year earlier in the variance table ([P]; the sales table's note prints ₹121.75 crore), while the quarter's line says nil a year earlier. If both lines describe the same item, last year's income fell in the June quarter, not the September one (our arithmetic: first-half figure less a nil for the quarter).

If that income is taken out of Q2 profit before tax of ₹185.78 crore, the result is about minus ₹201 crore (our arithmetic: 185.78 less 386.50, ignoring any costs or tax tied to it). The same income also sits in the supply-agreement revenue: the presentation's sales table carries a note against the fuel-supply-agreement row giving the current-year figure as ₹386.95 crore, a difference of ₹0.45 crore from the ₹386.50 crore in the text ([P]).

Sales per tonne in the quarter were ₹3,668.20 against a cost per tonne of ₹3,460.10, leaving ₹208.10 a tonne; a year earlier it was a loss of ₹59.86 a tonne ([P]). The table note places the incentive income inside the supply-agreement sales, so this swing includes it: spread over the 8.93 million tonnes it is about ₹433 a tonne, more than the ₹208.10 profit per tonne (our arithmetic).

Where the pricing power is, and is not

The sales table splits the story by product ([P], Q2 FY27 against Q2 FY26):

Washed coal's share of net sales was 14.6% against 12.8% (our arithmetic), and at about 3.8 times the average price per tonne of raw coal (our arithmetic: 12,680.84 against 3,373.39), it is the premium end of the sales mix. The company ties the higher washed-coal realisation to "Increase in the international prices" of coal ([P]). The raw coal sold under supply agreements, the bulk of volume, is where the sales table's note places the incentive income noted above; our reading is that the ₹3,354.88 a tonne is therefore not a clean price comparison.

Focus moat: access to coking coal and the ability to wash it. The first half also brought new processing and logistics capacity: the Bhojudih washery of 2.0 million tonnes a year began commercial operation from 26 May 2026, taking washing capacity to 17.35 million tonnes, and the Maheshpur rapid loading system, the company's first first-mile-connectivity project, was "operational on 20.09.2026 with the successful loading of a trial" rake, with capacity of 5.0 million tonnes a year ([P]). In the washery table, the "BCCL Washery Total" column shows a profit of ₹154.52 crore in the quarter against a loss of ₹62.70 crore (₹235.51 crore against a loss of ₹2.12 crore including the TSL washery), before the losses of non-operating washeries, which the presentation leaves out ([P]).

What drove margin down, and up

• Wages and one-offs. Employee costs were ₹1,621.30 crore, up 9.19%, including a provision of ₹76.07 crore under the wage agreement the deck calls NCWA XII for July to September and "One time payment of compensation of ₹39.83 crore." ([P]).
• Contract mining. Contractual expense rose 17.91% to ₹1,175.77 crore, primarily on "MDO (Mining Charges) from 1.47 MT in Q2 25-26 to 2.16 MT in" Q2 26-27, and also on diesel and wage escalation, the company says ([P]).
• Levies and power. Other expenses rose 30.70% to ₹1,369.82 crore, which the company attributes to a cess increase from "250/tonn to 450/tonn", higher offtake and a 40% rise in power tariffs ([P]).
• Borrowing. Finance costs rose 44.03% to ₹48.74 crore on working-capital loan, overdraft and LC facilities averaging "₹2300 cr in Q2 FY 2026-27 as against average ₹980 cr" a year earlier ([P]).
• Other income. It fell 66.28% to ₹158.57 crore on "the reduction in Liability write back." ([P]). For FY26, other income was ₹1,279.48 crore against a profit before tax of ₹149.18 crore ([R]).

The bear case

• Quality of the quarter's profit. Take out ₹386.50 crore of incentive and compensation income and Q2 is a loss (our arithmetic); the filing does not say whether it will recur.
• Output is behind plan. First-half production was 13.78 million tonnes, 12.51% below a year earlier and about 20% below the half-year target of 17.22 million tonnes (our arithmetic); overburden removal, the digging that opens up future coal, fell 20.66% to 64.87 million cubic metres against a 75.00 target ([P]). In the quarter, production rose 7.60% to 7.22 million tonnes but stayed below its 7.69 target ([P]). In the quarterly table the presentation prints the growth figures for overburden removal and offtake against each other's rows; the figures here follow the underlying numbers (offtake up 9.6% to 8.89 million tonnes, overburden removal down 1.2%, our arithmetic).
• Returns are thin. Annualised return on capital employed is 6.20% and on net worth 1.90% for the half year ([P]). The current ratio is 0.80, against 0.93 at March ([P]).
• Costs are growing faster than income in places. Other expenses rose 30.70% and finance costs 44.03% in the quarter, against total income up 25.46% ([P]).
• The review covers part of the company on others' word. The auditors did not review 18 areas or units, relying on the area auditors' reports; the conclusion is unmodified ("nothing has come to our attention") ([R]).

The case for

• A swing in the company's profit per tonne, from a loss of ₹59.86 to a profit of ₹208.10 ([P]), a figure that includes the incentive income (see above).
• Cash collection. Trade receivables fell to ₹2,105.38 crore from ₹2,863.18 crore at March; the half year's net operating cash flow was ₹777.16 crore, against minus ₹391.35 crore a year earlier ([R]). The presentation puts receivables at 34 days of revenue against 67 for FY26 ([P]). The presentation reports an all-time-high sales realisation of ₹10,259.63 crore for the half year against ₹7,817.65 crore a year earlier ([P]).
• New capacity. A longwall mining system at Moonidih has passed its surface compatibility test, with a stated minimum guaranteed output of 1.5 million tonnes a year, and a Katras Area mine awarded on an "MDO revenue-sharing basis", under which the company receives 9% of revenue, started production, with 13,400 tonnes in the half year ([P]).

What to watch

1. Whether the incentive and compensation income repeats in the December quarter, and what the company says it relates to.
2. Overburden removal and production against the half-year targets: they decide how much coal there is to sell in future quarters.
3. The mix: washed coking coal's share of sales, and the price it sells for.
4. Working-capital borrowing: ₹2,252.39 crore of current borrowings against ₹2,000.00 crore at March, and none long-term ([R]); the capital-spending target for FY27 is ₹1,000 crore against ₹630.77 crore of capital spending in the half year, of which ₹373.64 crore is an increase in capital advances and surveyed-off assets ([P]).

Sources

• [R] Bharat Coking Coal, results and review report, quarter and half year ended 30 September 2026 (NSE)
• [P] Bharat Coking Coal, presentation on Q2 and H1 results (NSE)
• [MS] Moat & Margin, Moat Screener and How MoatSCORE works

MoatSCORE: not yet scored. Bharat Coking Coal is not listed on the Moat Screener ([MS]).

Educational research, not investment advice. Every figure above is drawn from Bharat Coking Coal's own filings, read from the primary documents on 26 October 2026; derived figures are our arithmetic, labelled as such. MoatSCORE read live from the Moat Screener on 26 October 2026. No buy/sell recommendations, no price targets, no share prices. Moat & Margin is not a SEBI-registered Research Analyst or Investment Adviser.