Press Release September 29, 2026 NORTHERN COALFIELDS LIMITED Rating Assigned

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	20000.00	ACUITE AAA | Stable | Assigned	-	RBI
Total Outstanding	0.00	20000.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-

Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.

Rating Rationale

Acuite has assigned long term rating of 'ACUITE AAA' (read as ACUITE triple A)  on the Rs. 20,000 Cr. bank facilities of Northern Coalfields Limited. The outlook is 'Stable'. Rationale for rating The rating derives comfort from the company’s strategic importance to Coal India Limited for meeting the energy requirements for the country. Furthermore, the company has large coal reserves about 10.15 BT, and is being helmed by experienced management and professionals in the coal industry. It also continues to derive benefit from long-term fuel supply agreements (FSAs) of about 25 years, resulting in strong revenue visibility and having reputed customer base. Power Sector continues to remain the main consumer for the company with revenue contribution of about 86% in FY 26, and non-power sector which contribute to about 14% in FY 26.  The company also reported an increase in the scale of operations to Rs. 33,126.33 Cr. in FY 26 as compared to Rs. 31,549.62 Cr. in FY 25 on account of increase in coal production surpassing the Annual Action Plan for FY 26 (i.e. 140 MT) and offtake and realisation during the year, alongwith stable and healthy profitability margin of 43.59 percent in FY 26 as compared to 44.17 percent in FY 25. The company has strong financial risk profile with strong net worth, absence of gearing as it is a debt free company, and robust debt protection metrics. It has a moderate working capital cycle of about 147 days in FY 26 as compared to 158 days in FY 25. The company has been developing mines over the years with currently 5 ongoing open cast mining projects which will entail capex over the next 4-5 years with Jayant expansion project being the major mine being developed with large capex requirement. However, the same is expected to be funded largely from own sources and need based debt funding, if required. It has strong liquidity position with steady accruals as against no debt repayment, free unencumbered cash balances and investments in mutual funds and fixed deposits. However, ratings are constrained due to risk of inherent regulatory and socio-economic factors, and large capital expenditure requirements for ensuring adequate development and evacuation infrastructure being set up.

About the Company

­Northern Coalfields Limited was formed in November,1985 encompassing Singrauli Coalfields carved out of Central Coalfields Limited, with it’s headquarter at Singrauli, Madhya Pradesh. It is a Mini Ratna (Category-I) company since 2007 and is a wholly owned subsidiary of Coal India Limited under Ministry of Coal, Government of India. The area of Singrauli Coalfields is about 2202 Sq.Km. The Coalfield is divided into two basins- Moher Sub basin (312 Sq.Km) and Singrauli Main basin (1890 Sq.Km). It has a geological Coal reserve of 10.15 BT (6.98 BT in Moher Sub-basin and 3.17 BT in Main basin). All the coal mining operations of NCL, at present, are concentrated in Moher Sub-basin through 10 numbers of opencast mines. The company is into coal production (140.50 MT for FY 26), coal offtake (137.08 MT for FY 26) and overburden removal (461.05 Mcum for FY 26). The Chairman cum Managing Director of the company is Mr N. Franklin Jayakumar, was appointed on 8th September, 2026.(erstwhile director of South Eastern Coalfields Limited)

Unsupported Rating

­Not Applicable

Analytical Approach

­Acuite has taken standalone approach of business and financial view of Northern Coalfields Limited to arrive at the rating.

Key Rating Drivers

Strengths

Experienced promoters and benefits derived from Fuel Supply Agreements The company is a Mini Ratna (Category 1) wholly owned subsidiary of Coal India Limited (CIL) and is a strategic unit to CIL to meet the energy requirement of the country. It  has experienced management in the coal industry and caters to established customer base. Power Sector continues to remain the main consumer for the company contributing to about 86% in FY 26, followed by non-power sector which contribute 14% in FY 26. The company continues to derive strength from long-term demand committed through fuel supply agreements (FSAs) and balance by E-auction schemes. Acuite believes the company will benefit going forward with healthy relationship with customers and long term FSA's in the medium term. Increase in scale of operations alongwith stable profitability margins The scale of operations of the company has increased to Rs. 33,126.33 Cr. in FY 26 as compared to Rs. 31,549.62 Cr. in FY 25 on account of increase in coal production surpassing the Annual Action Plan (i.e. 140 MT) for FY 26 and realisation during the year. The company has achieved revenues of about Rs. 8184.50 Cr. as of Q1FY 27. The profitability margins remain stable yet healthy at 43.59 percent in FY 26 as compared to 44.17 percent in FY 25. Acuite believes that the revenues and profitability is expected to grow with expected increase in the coal production and coal offtake in the medium term.  Strong Financial Risk Profile The company has a strong financial risk profile followed by strong networth, absence of gearing and robust debt protection metrics. The company has a strong tangible networth of Rs. 28,846.36 Cr. in FY 26 as compared to Rs. 21,993.42 Cr. in FY 25 due to accretion of reserves despite dividends pay-out annually. The company has also paid dividend of about Rs. 3,810.88 Cr. in FY 26. The company does not have any debt in the books. The company’s plans to fund its capex requirements largely through internal accruals, even after large dividend payout or by need based debt funding over the long term. The TOL/TNW stood at 0.74 times in FY 26 as compared to Rs. 1.00 times in FY 25. Acuite believes that the financial risk profile is expected to remain strong in the medium term backed by steady net cash accruals and absence of any major debt funded capex plans over the medium term. Moderate working capital cycle The working capital cycle of the company is moderate marked by GCA days of 147 days in FY 26 as compared to 158 days in FY 25. The debtor days stood at 17 days in FY 26 as compared to 28 days in FY 25. The inventory days stood at 38 days in FY 26 as compared to 30 days in FY 25. The other current assets amount to Rs. 6,958.17 Cr. in FY 26 as compared to Rs. 5,557.86 Cr. in FY 25 which majorly comprises of Input Tax Receivable and other deposits and advances. The creditors days stood at 59 days in FY 26 as compared to 68 days in FY 25. Acuite believes that the working capital cycle is expected to remain in the similar lines going forward.

Weaknesses

Large capex requirements despite largely proposed to be funded from internal funds or need based debt The company has annual capex target of Rs. 5000- Rs. 7000 Cr. between FY26-FY28, mainly towards increasing its coal mining capacity, and solar power plant set up alongwith regular routine capex. This capex shall be funded from internal accruals and available liquidity and reliance on debt is expected to be need based. The mine development activities are expected to be taken over next 5-6 years and to be staggered basis the estimated date of completion. Delays in such capex may result in lower than expected off-takes as per budgetary allocations. Going forward, the company is expected to increase its capex spend on diversification projects, including solar power and their timely commissioning and stabilization would be key rating monitorable. Risks related to regulatory and socio-economic factors Coal pricing, production targets, mine allocations, environmental compliance, wage revisions, and commercial mining policies are subject to government intervention. Changes in mining policies or increased private sector participation can affect the company’s market position. Sustaining production requires continuous development of new mines and expansion of existing mines. Mining operations face geological uncertainties, varying coal quality, rising stripping ratios, and operational complexities. Delays in mine development can impact production growth. Acuite believes that the company will continue to be susceptible to regulatory and socio-economic risk factors over the medium term.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

Not Applicable

Potential triggers (individual or collective) for a downward rating action:

Debt/Equity to increase above 2 times in the near term Elongation of working capital cycle Larger than expected debt funded capex

Liquidity Position

Strong

The company has healthy net cash accruals of Rs. 12.430.46 Cr. as against nil debt repayment obligations. The company does not have any debt in the books. The current ratio stood at 1.35 times in FY 26 as compared to 1.03 times in FY 25. The company has free deposits with bank of Rs. 13,518.50 Cr in FY 26 as compared to Rs. 5304 Cr. in FY 25. The company has investment in mutual funds of Rs. 894.61 Cr. in FY 26 as compared to Rs. 576.78 Cr. in FY 25. The cash and bank balances stood at Rs. 2890.55 Cr. in FY 26 as compared to Rs. 4245.84 Cr. in FY 25. The company has incurred capital expenditure of about Rs. 3700- Rs. 4500 Cr. towards purchase of land and plant and equipment and stripping activity assets, for FY 26 and FY 25 through internal accruals. The company has large capex plans over the medium term expected to be funded by internal accruals and need based debt funding. Acuite believes that the liquidity is expected to remain strong in the medium term on account of steady accruals as against nil repayments, and free deposits with bank slightly moderated by large capex plans.

Outlook: Stable

­

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 26 (Actual)	FY 25 (Actual)
Operating Income	Rs. Cr.	33126.33	31549.62
PAT	Rs. Cr.	10656.84	9623.05
PAT Margin	(%)	32.17	30.50
Total Debt/Tangible Net Worth	Times	0.00	0.00
PBDIT/Interest	Times	191.80	210.70

Status of non-cooperation with previous CRA (if applicable)

­None

Any other information

­None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm

Note on complexity levels of the rated instrument

­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History:Not Applicable

­

­

Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Vedika Lahoti Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

List of instruments and names of regulators of the instruments

As required by SEBI Circular (SEBI/HO/DDHS/DDHS-PoD-2/I/4685/2026) dated February 10, 2026, a list of activities or instruments falling under the purview of various Financial Sector Regulators (FSRs), along with the names of respective FSRs, is being disclosed below: A. Rating Activity:   Sr. No. Instrument / activity Name Regulator of the instrument 1 Listed/Proposed to be listed Bonds/Debentures/Preference Shares (all securities) SEBI 2 Unlisted/Proposed to be unlisted Bonds/Debentures/ Preference share (all securities) MCA 3 Listed PTCs / Securitisation Notes (originated by entities regulated by RBI)1 6 RBI 4 Listed PTCs / Securitisation Notes (originated by entities not regulated by RBI)1 SEBI 5 Unlisted PTCs / Securitisation Notes (originated by entities regulated by RBI)1 RBI 6 Listed Commercial Paper and NCDs with original maturity less than 1 year RBI 7 Unlisted Commercial Paper and NCDs with original maturity less than 1 year RBI 8 Loan Facilities (Fund/Non-Fund Based) from Bank / NBFCs/ NHB/ FIs 2 RBI 9 External Commercial Borrowings and other similar borrowings RBI 10 Certificates of Deposit RBI 11 a Fixed Deposits raised by NBFCs, HFCs, FIs RBI 11 b Fixed Deposits raised by Banks 7 + 12 Fixed Deposits raised by corporates other than NBFCs, Banks, HFCs, FIs MCA 13 Inter Corporate Deposits/Loans extended by Corporates MCA 14 Borrowing programme 3 - 15 Issuer Ratings 4 - 16 Credit Ratings for Capital Protection Oriented Schemes (by Mutal Funds and AIFs) SEBI 17 Credit quality ratings (CQRs) for Mutual Fund Schemes and Schemes of AIFs SEBI 18 Listed Security Receipts 6 RBI 19 Unlisted Security Receipts RBI 20 Independent Credit Evaluation (ICE) RBI 21 Expected Loss Ratings (For Loan Facilities [Fund/Non-Fund based] from Banks/NBFCs/NHB/FIs) 7 + 22 Expected Loss Ratings (Listed / Proposed to be listed Bonds / Debentures / Preference Shares (all securities)) SEBI 23 Expected Loss Ratings (Unlisted / Proposed to be unlisted Bonds/ Debentures / Preference Shares (all securities)) MCA 24 Unlisted PTCs / Securitisation Notes (originated by entities not regulated by RBI) 1 Investor-side Regulator such as IRDAI, PFRDA 5   1 Includes securitisation transactions involving assignee payout, acquirer's payout. 2 Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions. 3 The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In Press Release(s) subsequent to issuance(s), Acuite shall separately capture the rated quantum details along with names of respective regulators. 4 There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs. 5 These ratings were assigned during regulatory regime prior to the introduction of SEBI CRA Circular dated Feb 10, 2026 and accordingly, investor side regulators have been included. 6 By virtue of the instrument being listed, SEBI acts as the regulator for listing and related issues. 7 To be finalized following a discussion with the regulatory authorities.   B. Other activities:   Sr. No. Activity Name Regulator of the activity 1 Monitoring Agency SEBI 2 Research activities, incidental to rating, such as research for Economy, Industries and Companies 8 Not applicable 8 permitted by SEBI vide SEBI Master Circular for CRAs. Disclosure on instruments / activities and names of regulators: A list of products/activities or ratings of instruments falling under the purview of various financial sector regulators (FSRs) along with the names of respective FSRs has also been duly disclosed by Acuite on its website. A link to the same has been provided below for ready reference: https://acuite.in/Activities-and-Regulators.html   About Acuité Ratings & Research­ Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.