Coal Sector Analysis: Recommendations Amidst Challenges

Q3 2025 Performance Overview

The coal sector faced significant challenges in Q3 2025, with declining financial performance across major emitters. Despite these challenges, analysts have identified opportunities within the sector.

PT Bukit Asam Tbk (PTBA)

PTBA recorded Rp 31.33 trillion revenue in Q3 2025, a 2% year-on-year increase. However, the company's net profit dropped by 56.25% to Rp 1.4 trillion due to an 11% increase in cost of goods sold. The company's Tanjung Enim-Keramasan coal transportation expansion project is 58% complete and is expected to increase transportation capacity by 20 million tons per year. Analysts from Helen Philip Sekuritas Indonesia recommend a 'Hold' rating with a target price of Rp 2,400.

PT Indika Energi Tbk (INDY)

INDY's subsidiary, Kideco, managed to reduce cash costs by 15% to $44.5/ton in Q3 2025. This was achieved through a new royalty scheme implemented in May 2025, which reduced royalties from 28% to 19%, and a lower stripping ratio of 5.1x. Although net profit decreased by 25% year-on-year to $21 million, the company's gold segment is expected to drive future growth, with production starting in H2 2026. Analysts from Yoga Ahmad Gifari, Sucor Sekuritas, recommend a 'Buy' rating with a target price of Rp 3,300.

PT Indo Tambangraya Megah Tbk (ITMG)

ITMG has been actively diversifying its energy portfolio, with renewable energy contracts reaching 102 MWp by Q3 2025, a 13% QoQ increase. The company also acquired a 9.62% stake in PT Adhi Kartiko Pratama Tbk (NICE) for Rp 256.23 billion, marking a strategic move into the nickel value chain. Rizal Rafly from Ajaib Sekuritas Asia recommends a 'Buy' rating with a target price of Rp 24,300.

Market Outlook

The coal sector's future performance is expected to be influenced by China's demand and global commodity prices. Companies that can adapt through efficiency measures and diversification strategies are likely to perform better in the challenging market conditions.