⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
NLCINDIA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | NLCINDIA | Market Cap | 36,267 Cr. | Current Price | 262 ₹ | High / Low | 292 ₹ |
| Stock P/E | 18.7 | Book Value | 131 ₹ | Dividend Yield | 1.37 % | ROCE | 9.02 % |
| ROE | 5.61 % | Face Value | 10.0 ₹ | DMA 50 | 256 ₹ | DMA 200 | 251 ₹ |
| Chg in FII Hold | -0.03 % | Chg in DII Hold | -0.15 % | PAT Qtr | 428 Cr. | PAT Prev Qtr | 485 Cr. |
| RSI | 54.0 | MACD | 0.39 | Volume | 14,02,300 | Avg Vol 1Wk | 48,03,236 |
| Low price | 202 ₹ | High price | 292 ₹ | PEG Ratio | 60.4 | Debt to equity | 0.47 |
| 52w Index | 65.9 % | Qtr Profit Var | 4.78 % | EPS | 14.0 ₹ | Industry PE | 30.0 |
📊 Financials
- Revenue & Profitability: PAT declined from ₹485 Cr. to ₹428 Cr. (-4.78%), showing earnings pressure. EPS at ₹14.0 is modest.
- Margins & Returns: ROCE (9.02%) and ROE (5.61%) are weak, reflecting limited efficiency and profitability.
- Debt: Debt-to-equity ratio of 0.47 indicates moderate leverage.
- Cash Flow: Stable due to government backing, but profitability remains inconsistent.
💹 Valuation
- P/E Ratio: 18.7 vs Industry PE of 30.0 → Undervalued compared to peers.
- P/B Ratio: ~2.0 (Price ₹262 / Book Value ₹131) → Reasonable valuation.
- PEG Ratio: 60.4 → Extremely high, indicating poor growth prospects relative to valuation.
- Intrinsic Value: Current price appears fairly valued, with limited upside.
🏢 Business Model & Competitive Advantage
- NLC India operates in lignite mining and power generation, benefiting from government contracts and energy demand.
- Competitive advantage lies in scale, regulatory support, and long-term projects.
- Dividend yield of 1.37% provides modest shareholder returns.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive near ₹230–245 range (below current levels, closer to DMA 200 at ₹251).
- Long-Term Holding: Suitable for conservative investors seeking exposure to power generation. Accumulation should be cautious due to weak return ratios.
✅ Positive
- Undervalued compared to industry peers (P/E 18.7 vs 30.0).
- Dividend yield of 1.37% supports investor confidence.
- Government backing ensures operational stability.
⚠️ Limitation
- Weak ROCE (9.02%) and ROE (5.61%) compared to peers.
- Extremely high PEG ratio (60.4) highlights poor growth prospects.
- Quarterly profit decline (-4.78%) signals near-term weakness.
📉 Company Negative News
- PAT dropped compared to previous quarter.
- FII holdings reduced (-0.03%) and DII holdings reduced (-0.15%), showing cautious sentiment.
📈 Company Positive News
- Dividend yield remains attractive at 1.37%.
- Stock trading above DMA 50 (₹256) shows technical support.
🏭 Industry
- Power generation industry benefits from rising energy demand and government initiatives.
- Industry PE at 30.0 suggests peers trade at higher valuations, making NLC India undervalued.
🔎 Conclusion
- NLC India offers stability with government backing and modest dividend yield.
- However, weak return ratios, high PEG, and profit decline limit upside potential.
- Best strategy: Accumulate near ₹230–245 range for long-term holding, while avoiding aggressive buying at current levels.