4 Stocks to Watch as Cabinet Approves Coal Gasification Scheme

#2 Larsen & Toubro

Next on the list is Larsen & Toubro (L&T).

The company is an Indian multinational engaged in EPC Projects, Hi-Tech Manufacturing and Services. It operates in over 50 countries worldwide.

It's involved in coal gasification through its hydrocarbon onshore business vertical. This business provides integrated 'design and build' turnkey solutions across multiple geographies.

The onshore business provides end-to-end 'Design to Build' LumpSum Turnkey (LSTK) EPC solutions across the midstream and downstream segments of the hydrocarbon value chain.

Its expertise spans oil & gas processing and treatment facilities, crude oil and product storage tanks & terminals, coal / pet-coke gasification and more.

Recently, in May 2026, Larsen & Toubro's Energy Hydrocarbon Onshore business secured a large order from Bharat Coal Gasification and Chemicals (BCGCL), a joint venture between Coal India and Bharat Heavy Electricals (BHEL), for a coal-to-ammonium nitrate project in Odisha.

The project involves setting up a nitric acid and ammonium nitrate plant on a lump sum turnkey (LSTK) basis.

Once operational, the facility will convert coal into ammonium nitrate with a production capacity of 2,000 tonnes per day, catering to sectors such as mining, infrastructure, and industrial explosives.

L&T's scope includes engineering, procurement, construction, commissioning, performance testing, and complete project management.

The order aligns closely with the Government of India's target of achieving 100 m tonnes of coal gasification capacity by 2030 under the Aatmanirbhar Bharat initiative.

As coal gasification projects gain momentum, companies with strong EPC and gasification capabilities are expected to see rising opportunities. This makes L&T a key stock to watch amid the government's coal gasification push.

On the financial front, over the past three years the company's revenue has seen a growth of 17.8%, meanwhile, net profit grew at a CAGR of 19.8%.

The company's three-year average ROE and ROCE stand at 16.9% and 20.4%.

L&T's Financial Snapshot (FY23-25)

For more details, see the L&T company fact sheet and quarterly results.

#3 Bharat Heavy Electrical Ltd

Next on the list is Bharat Heavy Electrical.

Bharat Heavy Electricals Limited (BHEL) is a leading company in the Capital Goods sector, proudly contributing to the Make in India initiative since 1964.

Serving both domestic and international markets, BHEL operates across the power and industrial sectors, offering comprehensive solutions, including the supply of equipment, systems, and services.

BHEL has also emerged as an important player in India's coal gasification ambitions. The company has formed a joint venture with Coal India called Bharat Coal Gasification and Chemicals (BCGCL), which was incorporated in May 2024. In the JV, Coal India holds a 51% stake and BHEL owns 49%.

The JV aims to establish India's first commercial-scale coal-to-2,000 TPD ammonium nitrate plant using BHEL's indigenously developed coal gasification technology.

The project will convert high-ash domestic coal into syngas, ammonia, nitric acid, and technical-grade ammonium nitrate, supporting India's push toward import substitution and self-reliance in chemicals and fertilisers.

BHEL secured an order from BCGCL in January 2026 for coal gasification and raw syngas cleaning facilities for the Odisha-based coal-to-ammonium nitrate project.

The scope includes engineering, procurement, construction, commissioning, and performance guarantees for the core process units of the integrated chemical complex.

The project will deploy BHEL's in-house developed Pressurised Fluidised Bed Gasification (PFBG) technology, marking its first commercial-scale implementation.

With the government aggressively pushing coal gasification through the newly approved incentive scheme, BHEL stands out as a key stock to watch.

On the financial front, over the past 3 years the company's revenue has seen a growth of 9.3%, meanwhile, net profit grew at a CAGR of 6.3%.

The company's three-year average ROE and ROCE stand at 2% and 5.5%.

BHEL's Financial Snapshot (FY23-25)

For more details, see the BHEL company fact sheet and quarterly results.

#4 Rashtriya Chemicals and Fertilisers

Next on the list is Rashtriya Chemicals and Fertilisers.

Rashtriya Chemicals & Fertilisers Limited (RCF) is a leading Indian central public sector undertaking under the Ministry of Chemicals and Fertilisers, established in 1978 and headquartered in Mumbai.

As a Navratna company, RCF manufactures and markets fertilisers, primarily Urea and NPK-and industrial chemicals, acting as the fourth largest urea producer in India.

The company has been designated as a State Trading Enterprise (STE) for urea imports on behalf of the government. Based on directions from the Department of Fertilizers, the company imported nearly 1.15 m metric tonnes of urea during FY25 through global tenders.

In the government's coal gasification push, as coal-derived syngas can potentially replace expensive imported feedstock used in ammonia and urea production. The cabinet has specifically highlighted reducing dependence on imports of urea, ammonia, and LNG.

This could gradually help lower raw material costs for fertiliser manufacturers and improve long-term operating efficiencies.

On the financial front, over the past three years the company's revenue has seen a growth of 9.7%.

The company's three-year average ROE and ROCE stand at 10.4% and 15.4%.

Rashtriya Chemicals and Fertilisers' Financial Snapshot (FY23-25)

For more details, see the COAL INDIA company fact sheet and quarterly results

Conclusion

The government's coal gasification push is expected to create fresh opportunities for companies across mining, EPC, industrial gases, chemicals, and fertiliser segments.

At the same time, the sector remains capital intensive and project execution timelines could be lengthy due to infrastructure, environmental, and commercial viability challenges.

The long-term benefits for companies will also depend on policy continuity, timely implementation, and the ability to scale projects efficiently.

Investors should carefully evaluate these companies' fundamentals, corporate governance, and valuations as key factors when conducting due diligence before making investment decisions.

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