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Coal India and Power Grid are valued in different ways.
Coal India is valued on discounted cash flow and Power Grid on excess return, because the two businesses do not work the same way. Below, each is set out on its own record and its own value drivers; the two fair values sit in the full valuations.
- Valuation method: Coal India on discounted cash flow; Power Grid on excess return.
- Size: the two are worth roughly the same on the stock market.
- Record: Coal India has grown revenue faster: Coal India compounded at about 9% a year (FY2018–FY2026) and Power Grid at about 6% (FY2018–FY2026).
- What to watch: volumes at Coal India; capex on new lines at Power Grid.
| Coal India | Power Grid | |
|---|---|---|
| Price | ₹404 | ₹257 |
| Market cap | ₹2.49L Cr | ₹2.39L Cr |
| P/E | 8.0 | 14.8 |
| P/B | 2.09 | 2.38 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Discounted cash flow | Excess return |
01Two businesses
Most of India's coal, from one company
Coal India is the world's largest coal producer by output and is majority-owned by the Government of India. Through subsidiaries such as Mahanadi Coalfields, South Eastern Coalfields and Northern Coalfields, it produces roughly three-quarters of the coal mined in India.
The national grid, as a business
Power Grid Corporation of India, majority-owned by the Government of India, owns and operates most of the country's inter-state electricity transmission network — the high-voltage lines and substations that move power from where it is made to where it is used.
02The records side by side
Coal India has grown revenue faster: Coal India compounded at about 9% a year (FY2018–FY2026) and Power Grid at about 6% (FY2018–FY2026). By revenue, Coal India is about 3.6 times the size of Power Grid. Coal India kept 18.5% of revenue as net profit in FY2026; Power Grid kept 34.1% of revenue as net profit in FY2026 — a sign of very different business models.
Full ten-year tables and charts are on each company's page: Coal India · Power Grid.
03What each price assumes
Work backwards from each share price and you can see what buyers are taking for granted — the rate each company must sustain to justify what it costs, against what its own record supports.
04What decides each one's value
- VolumesIndia's power demand still leans heavily on coal, so output has kept growing.
- E-auction premiumsCoal sold at auction earns far more than contract coal; the premium swings with demand and imported-coal prices.
- Capex on new linesBringing renewable power from deserts and coasts to cities needs a huge transmission build-out, which grows Power Grid's earning base.
- Allowed returnsThe regulated return on equity is the core of its profit.
05What could go wrong
- Energy transitionOver the long term, renewables will reduce coal demand.
- Private and captive miningMore coal mined by others reduces Coal India's share.
- Regulatory resetsA lower allowed return in a future tariff period would reduce value.
- ExecutionLand acquisition and right-of-way problems can delay projects.
06Which is better value?
Sign in free to see which trades further below its worth
- ✓Both fair values per share — each on the method that fits the business
- ✓Every step of both workings — growth, margins and cost of capital, with sources
- ✓Bull, base and bear cases — for each company
- ✓Downloadable reports — the full write-up for each, yours to keep
08Questions people ask
Is Coal India or Power Grid better value?
That turns on how far each share trades from its estimated fair value. Both figures, with every step of the working, are in the full valuations, free to view once you sign in. On the public numbers, Coal India trades at 8.0 times earnings and 2.09 times book value, and Power Grid at 14.8 times earnings and 2.38 times book value — but multiples alone mislead when two businesses work differently, which is why each is valued on the method that fits it.
What is the difference between Coal India and Power Grid?
Coal India is the world's largest coal producer by output and is majority-owned by the Government of India. Power Grid Corporation of India, majority-owned by the Government of India, owns and operates most of the country's inter-state electricity transmission network — the high-voltage lines and substations that move power from where it is made to where it is used.
Are Coal India and Power Grid valued the same way?
No. Coal India is valued on discounted cash flow and Power Grid on excess return, because forcing one model onto both would misstate at least one of them.
What does today's price assume for Coal India and Power Grid?
Worked backwards from the share price, Coal India needs about 0% growth and Power Grid about 14.6% return on equity, against 10% and 17.0% in their own records.