NLCINDIA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.2

📊 Core Financials Overview

Profitability

PAT dropped from ₹656 Cr to ₹368 Cr — a –25.8% decline, indicating earnings volatility.

EPS: ₹12.8 — decent, but not exceptional given the scale.

Return Metrics

ROCE: 9.02% and ROE: 5.61% — modest, reflecting capital-intensive operations.

Debt Profile

Debt-to-equity: 0.43 — moderate leverage, manageable for a PSU with regulated returns.

Cash Flow: Positive but showing signs of deceleration — may affect future capex pacing

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💹 Valuation Indicators

Metric Value Commentary

P/E Ratio 20.0 Undervalued vs. industry average of 31.2 — attractive entry point.

P/B Ratio ~2.03 Reasonable given asset-heavy model.

PEG Ratio 64.7 Extremely high — suggests valuation may be stretched relative to growth.

Intrinsic Value Estimated near ₹220–₹230 Current price slightly above fair value, but supported by long-term growth plans.

🧠 Business Model & Competitive Advantage

NLC India Ltd. (formerly Neyveli Lignite Corporation) is a diversified PSU operating across

Core Segments

Lignite mining, thermal power generation, and renewable energy.

Operates 30.1 MTPA lignite mines and 6,731 MW of installed power capacity

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Revenue Streams

Electricity sales via long-term PPAs with state utilities.

Lignite supply to internal and external thermal plants.

Renewable Expansion

Currently operates 1,431 MW of renewables; targeting 10 GW by 2030

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RE assets transferred to a new subsidiary, with IPO planned in FY27 — expected to raise ₹4,000 Cr

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Capex Commitment

₹1.16 lakh Cr planned through FY30 — aimed at scaling regulated equity base to ₹18,000 Cr

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Its competitive edge lies in multi-pronged energy diversification, government alignment, and regulated returns, positioning it as a long-term infrastructure and clean energy play.

📈 Technical & Sentiment Signals

RSI: 63.0 — nearing overbought zone, short-term caution.

MACD: Positive — bullish momentum.

Volume: Below weekly average — suggests consolidation.

DMA 50/200: Price above both — confirms long-term uptrend.

🎯 Entry Zone & Long-Term Guidance

Suggested Entry Zone: ₹230–₹245 — near DMA levels and below RSI peak.

Long-Term View: NLC India is a stable PSU with strong fundamentals, moderate debt, and aggressive renewable expansion. Suitable for long-term holding, especially for investors seeking exposure to India’s energy transition. Dividend yield of 1.17% adds modest income support.

You can explore NLC’s renewable roadmap and valuation outlook or its financial profile on TipRanks for deeper insights.

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www.tipranks.com

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www.valueresearchonline.com

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www.jmfinancialservices.in

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